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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Balance Sheet The following is an alphabetical list or Lloyd’s Hudson Dealership Inc.’s December 31, 2019, balance sheet accounts and amounts:

Chapter 4, Problem 11P, Balance Sheet The following is an alphabetical list or Lloyds Hudson Dealership Inc.s December 31,

Required:

  1. 1. Prepare a properly classified balance sheet for Lloyd’s Hudson Dealership as of December 31, 2019. List the additional parenthetical or note disclosures (if any) that should be made for each item.
  2. 2. Next Level Compute the current ratio. What does it indicate about Lloyd’s Hudson Dealership?

1.

To determine

Prepare a properly classified balance sheet and list the additional parenthetical or note disclosers that must be made for each item.

Explanation
Incorporation L
Balance Sheet
December 31, 2019
AssetsAmount ($)Amount ($)Amount ($)
Current Assets:   
Cash 7,200 
Marketable securities (short-term) 8,400 
Accounts receivable15,300  
Less: Allowance for doubtful accounts(1,000)14,300 
Inventory:  
   Raw materials10,100 
   Work in process14,700 
   Finished goods23,80048,600 
Prepaid insurance 2,600 
Total current assets  81,100
Long-Term Investments:   
   Bond sinking fund 7,700 
   Investment in available-for-sale securities 16,400 
Total long-term liabilities  24,100
Property, Plant, and Equipment:   
Land 17,000 
Buildings92,500  
Less: Accumulated depreciation(32,400)60,100 
Machinery and Equipment57,800  
Less: Accumulated depreciation(30,000)27,800 
Total property, plant, and equipment  104,900
Intangible Assets:   
Patents (net)  8,600
Total Assets  218,700
Liabilities   
Current Liabilities:   
Notes payable (Short-term) 5,000 
Accounts payable 20,900�...

2.

To determine

Compute the current ratio.

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