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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 Preparation The December 31, 2019, balance sheet accounts of Hitt Company are shown here in alphabetical order:

Chapter 4, Problem 7E, Balance Sheet Preparation The December 31, 2019, balance sheet accounts of Hitt Company are shown , example  1

Chapter 4, Problem 7E, Balance Sheet Preparation The December 31, 2019, balance sheet accounts of Hitt Company are shown , example  2

Required:

  1. 1. Prepare Hill’s December 31, 2019, balance sheet.
  2. 2. Compute the working capital and the current ratio.
  3. 3. Next Level Discuss how the format of Hitt’s balance sheet would be different from Requirement 1 if the company used IFRS.

1.

To determine

Prepare the balance sheet of Company H.

Explanation
Company H
Balance Sheet
December 31,2019
AssetsAmount ($)Amount ($)Amount ($)
Current Assets:   
Cash 2,900 
Marketable securities (short-term) 6,100 
Accounts receivable21,500  
Less: Allowance for doubtful accounts(800)20,700 
Inventory 37,200 
Total current assets  66,900
Property, Plant, and Equipment:   
Land 30,000 
Buildings144,000  
Less: Accumulated depreciation(53,000)  
Equipment72,400  
Less: Accumulated depreciation(35,100)37,300 
Total property, plant, and equipment  158,300
Intangible Assets:   
Patents (net) 9,800 
Trademarks 3,700 
Total intangible assets  13,500
Total Assets  238,700
Liabilities   
Current Liabiliti...

2.

To determine

Compute the working capital and the current ratio.

3.

To determine

Discuss the manner in which the format of Company H’s balance sheet will be different from requirement 1, if the company uses IFRS.

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