Intermediate Accounting Chapter 3 Homework

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The following is a December 31, 2016, post-closing trial balance for the Jackson Corporation.

 

  Account Title Debits Credits
  Cash 51,000
  Accounts receivable 45,000
  Inventories 86,000
  Prepaid rent 27,000
  Marketable securities (short term) 21,000
  Machinery 200,000
  Accumulated depreciation—machinery 22,000
  Patent (net of amortization) 90,000
  Accounts payable 13,500
  Wages payable 9,500
  Taxes payable 43,000
  Bonds payable (due in 10 years) 250,000
  Common stock 140,000
  Retained earnings 42,000
      Totals 520,000 520,000

 

Required:
Prepare a classified balance sheet for Jackson Corporation at December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)

 

Cone Corporation is in the process of preparing its December 31, 2016, balance sheet. There are some questions as to the proper classification of the following items:

 

 a. $67,000 in cash restricted in a savings account to pay bonds payable. The bonds mature in 2020.
 b. Prepaid rent of $41,000, covering the period January 1, 2017, through December 31, 2018.
 c. Note payable of $234,000. The note is payable in annual installments of $37,000 each, with the first installment payable on March 1, 2017.
 d. Accrued interest payable of $29,000 related to the note payable.
 e. Investment in marketable securities of other corporations, $114,000. Cone intends to sell one-half of the securities in 2017.

 

Required:
Prepare a partial classified balance sheet to show how each of the above items should be reported.

 

The current asset section of Guardian Consultant’s balance sheet consists of cash, accounts receivable, and prepaid expenses. The 2016 balance sheet reported the following: cash, $1,360,000; prepaid expenses, $420,000; noncurrent assets, $3,000,000; and shareholders’ equity, $3,100,000. The current ratio at the end of the year was 2.8 and the debt to equity ratio was 2.0.

 

Required:
Determine the following 2016 amounts and ratios: (Round your “The acid-test ratio” answer to 1 decimal place.)
The following is the ending balances of accounts at December 31, 2016, for the Vosburgh Electronics Corporation.
  Account Title Debits Credits
  Cash 103,000
  Short-term investments 218,000
  Accounts receivable 159,000
  Long-term investments 53,000
  Inventories 233,000
  Loans to employees 58,000
  Prepaid expenses (for 2017) 34,000
  Land 298,000
  Building 1,730,000
  Machinery and equipment 655,000
  Patent 170,000
  Franchise 58,000
  Note receivable 340,000
  Interest receivable 30,000
  Accumulated depreciation—building 638,000
  Accumulated depreciation—equipment 228,000
  Accounts payable 207,000
  Dividends payable (payable on 1/16/17) 28,000
  Interest payable 34,000
  Taxes payable 58,000
  Deferred revenue 78,000
  Notes payable 336,000
  Allowance for uncollectible accounts 26,000
  Common stock 2,072,000
  Retained earnings 434,000
        Totals 4,139,000 4,139,000

 

Additional information:
1. The common stock represents 1.5 million shares of no par stock authorized, 680,000 shares issued and outstanding.
2. The loans to employees are due on June 30, 2017.
3. The note receivable is due in installments of $68,000, payable on each September 30. Interest is payable annually.
4. Short-term investments consist of marketable equity securities that the company plans to sell in 2017 and $68,000 in treasury bills purchased on December 15 of the current year that mature on February 15, 2017. Long-term investments consist of marketable equity securities that the company does not plan to sell in the next year.
5. Deferred revenue represents customer payments for extended service contracts. Seventy five percent of these contracts expire in 2017, the remainder in 2018.
6. Notes payable consists of two notes, one for $118,000 due on January 15, 2018, and another for $218,000 due on June 30, 2019.
Required:
Prepare a classified balance sheet for Vosburgh at December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)
 
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