Preparing a Current Asset Section along with Note Disclosures The following selected balances are from the post-closing trial balance of WKO Inc. as of December 31, 2020. Cash $120,000 Equipment $128,000 Investments 156,800 Accumulated depreciation 24,000 Accounts receivable 120,000 Franchise, net 24,000 Inventory 128,000 Customer deposits received in advance 6,400 Note receivable 160,000 Accounts payable 104,000 Additional information Included in the cash balance is $40,000 of cash restricted for 18 months due to a debt agreement. Included in investments is $44,800 of short-term investments at fair value and the remaining is long-term, also recognized at fair value. 4% of the accounts receivable balance of $120,000 is estimated to be uncollectible. Inventory is valued at the lower of cost or market. The cost value is determined using the average cost method. The note receivable of $160,000 is due in 21 months. The interest rate is 5% and the note originated on September 30, 2020. Interest is paid quarterly with the first payment due January 1, 2021. a. Prepare the current asset section of the classified balance sheet for WKO Inc. on December 31, 2020. Note: Do not use negative signs in your answers. Current Asset Section December 31, 2020 Cash Answer Short-term investments Answer Accounts receivable Answer Less: Allowance for doubtful accounts Answer Answer Inventory Answer Interest receivable Answer Total current assets Answer b. Prepare a list of four notes, regarding all assets, to be included in the significant accounting policy note accompanying the financial statements of WKO Inc. on December 31, 2020. Note: Select your answers in alphabetical order using the first word provided in the note.
Preparing a Current Asset Section along with Note Disclosures The following selected balances are from the post-closing trial balance of WKO Inc. as of December 31, 2020. Cash $120,000 Equipment $128,000 Investments 156,800 Accumulated depreciation 24,000 Accounts receivable 120,000 Franchise, net 24,000 Inventory 128,000 Customer deposits received in advance 6,400 Note receivable 160,000 Accounts payable 104,000 Additional information Included in the cash balance is $40,000 of cash restricted for 18 months due to a debt agreement. Included in investments is $44,800 of short-term investments at fair value and the remaining is long-term, also recognized at fair value. 4% of the accounts receivable balance of $120,000 is estimated to be uncollectible. Inventory is valued at the lower of cost or market. The cost value is determined using the average cost method. The note receivable of $160,000 is due in 21 months. The interest rate is 5% and the note originated on September 30, 2020. Interest is paid quarterly with the first payment due January 1, 2021. a. Prepare the current asset section of the classified balance sheet for WKO Inc. on December 31, 2020. Note: Do not use negative signs in your answers. Current Asset Section December 31, 2020 Cash Answer Short-term investments Answer Accounts receivable Answer Less: Allowance for doubtful accounts Answer Answer Inventory Answer Interest receivable Answer Total current assets Answer b. Prepare a list of four notes, regarding all assets, to be included in the significant accounting policy note accompanying the financial statements of WKO Inc. on December 31, 2020. Note: Select your answers in alphabetical order using the first word provided in the note.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter21: The Statement Of Cash Flows
Section: Chapter Questions
Problem 10E: Spreadsheet The following 2019 information is available for Payne Company: Partial additional...
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Preparing a Current Asset Section along with Note Disclosures
The following selected balances are from the post-closing
Cash | $120,000 | Equipment | $128,000 |
Investments | 156,800 | Accumulated |
24,000 |
120,000 | Franchise, net | 24,000 | |
Inventory | 128,000 | Customer deposits received in advance | 6,400 |
Note receivable | 160,000 | Accounts payable | 104,000 |
Additional information
- Included in the cash balance is $40,000 of cash restricted for 18 months due to a debt agreement.
- Included in investments is $44,800 of short-term investments at fair value and the remaining is long-term, also recognized at fair value.
- 4% of the accounts receivable balance of $120,000 is estimated to be uncollectible.
- Inventory is valued at the lower of cost or market. The cost value is determined using the average cost method.
- The note receivable of $160,000 is due in 21 months. The interest rate is 5% and the note originated on September 30, 2020. Interest is paid quarterly with the first payment due January 1, 2021.
a. Prepare the current asset section of the classified balance sheet for WKO Inc. on December 31, 2020.
- Note: Do not use negative signs in your answers.
Current Asset Section December 31, 2020 |
||
---|---|---|
Cash
|
Answer | |
Short-term investments
|
Answer | |
Accounts receivable
|
Answer | |
Less: Allowance for doubtful accounts
|
Answer | Answer |
Inventory
|
Answer | |
Interest receivable
|
Answer | |
Total current assets | Answer |
b. Prepare a list of four notes, regarding all assets, to be included in the significant accounting policy note accompanying the financial statements of WKO Inc. on December 31, 2020.
Note: Select your answers in alphabetical order using the first word provided in the note.
Answer |
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