Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2020. Inventory (finished goods) $ 52,000 Cost of Goods Sold $2,100,000 Unearned Service Revenue 90,000 Notes Receivable 40,000 Equipment 253,000 Accounts Receivable 161,000 Inventory (work in process) 34,000 Inventory (raw materials) 207,000 Cash 37,000 Supplies Expense 60,000 Debt Investments (trading) 31,000 Allowance for Doubtful Accounts 12,000 Customer Advances 36,000 Licenses 18,000 Restricted Cash for Plant Expansion 50,000 Additional Paid-in Capital 88,000 Treasury Stock 22,000 The following additional information is available. 1. Inventories are valued at lower-of-cost-or-market using LIFO. 2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $50,600. 3. The short-term investments have a fair value of $29,000. 4. The notes receivable are due April 30, 2022, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2020.) 5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $50,000 are pledged as collateral on a bank loan. 6. Licenses are recorded net of accumulated amortization of $14,000. 7. Treasury stock is recorded at cost. Instructions Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2020, balance sheet, with appropriate disclo

Cornerstones of Financial Accounting

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ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

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Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2020.

Inventory (finished goods)		$ 52,000		Cost of Goods Sold	$2,100,000
Unearned Service Revenue	90,000	Notes Receivable	40,000
Equipment	253,000	Accounts Receivable	161,000
Inventory (work in process)	34,000	Inventory (raw materials)	207,000
Cash	37,000	Supplies Expense	60,000
Debt Investments (trading)	31,000	Allowance for Doubtful Accounts	12,000
Customer Advances	36,000	Licenses	18,000
Restricted Cash for Plant Expansion	50,000	Additional Paid-in Capital	88,000
		Treasury Stock	22,000

The following additional information is available.

1. Inventories are valued at lower-of-cost-or-market using LIFO.

2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $50,600.

3. The short-term investments have a fair value of $29,000.

4. The notes receivable are due April 30, 2022, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2020.)

5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $50,000 are pledged as collateral on a bank loan.

6. Licenses are recorded net of accumulated amortization of $14,000.

7. Treasury stock is recorded at cost.

Instructions

Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2020, balance sheet, with appropriate disclo

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