The assets of Fonzarelli Corporation are presented below (000s omitted). Fonzarelli CorporationBalance Sheet (Partial)December 31, 2020 Assets Current assets Cash $ 100,000 Unclaimed payroll checks 27,500 Debt investments (trading) (fair value $30,000) at cost 37,000 Accounts receivable (less bad debt reserve) 75,000 Inventory—at lower-of-cost (determined by the next-in, first-out method)-or-net realizable value 240,000 Total current assets 479,500 Tangible assets Land (less accumulated depreciation) 80,000 Buildings and equipment $800,000 Less: Accumulated depreciation 250,000 550,000 Net tangible assets 630,000 Long-term investments Stocks and bonds 100,000 Treasury stock 70,000 Total long-term investments 170,000 Other assets Discount on bonds payable 19,400 Sinking fund 975,000 Total other assets 994,400 Total assets $2,273,900 Instructions Indicate the deficiencies, if any, in the foregoing presentation of Fonzarelli Corporation’s assets.

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

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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Question

The assets of Fonzarelli Corporation are presented below (000s omitted).

Fonzarelli Corporation Balance Sheet (Partial) December 31, 2020
Assets
Current assets
Cash		$ 100,000
Unclaimed payroll checks		27,500
Debt investments (trading) (fair value $30,000) at cost		37,000
Accounts receivable (less bad debt reserve)		75,000
Inventory—at lower-of-cost (determined by the next-in, first-out method)-or-net realizable value		240,000
Total current assets		479,500
Tangible assets
Land (less accumulated depreciation)		80,000
Buildings and equipment	$800,000
Less: Accumulated depreciation	250,000	550,000
Net tangible assets		630,000
Long-term investments
Stocks and bonds		100,000
Treasury stock		70,000
Total long-term investments		170,000
Other assets
Discount on bonds payable		19,400
Sinking fund		975,000
Total other assets		994,400
Total assets			$2,273,900

Instructions

Indicate the deficiencies, if any, in the foregoing presentation of Fonzarelli Corporation’s assets.

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