Complex Balance Sheet Presented below is the unaudited balance sheet as of December 31, 2019, prepared by Zeus Manufacturing Corporation’s bookkeeper.
Your company has been engaged to perform an audit, during which you discover the following information:
Prepare a corrected classified balance sheet as of December 31, 2019.
Balance sheet: This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and stockholders (stockholders’ equity) over those resources. The resources of the company are assets which include money contributed by stockholders and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and stockholders’ equity.
Prepare a corrected classified balance sheet of Company Z:
Company Z | |||
Balance Sheet | |||
December 31,2019 | |||
Current Assets: | Amount ($) | Amount ($) | Amount ($) |
Cash (1) | 109,000 | ||
Accounts receivable (net) (2) | 317,700 | ||
Inventories | 560,000 | ||
Total current assets | 986,700 | ||
Long-Term Investment, at fair value (3) | 51,300 | ||
Property, Plant, and Equipment (at cost): | |||
Land (4) | 200,000 | ||
Building | 1,750,000 | ||
Machinery and equipment | 1,964,000 | ||
Total | 3,714,000 | ||
Less: Accumulated depreciation | (420,000) | 3,294,000 | |
Total property, plant, and equipment | 3,494,000 | ||
Intangible Asset: | |||
Goodwill | 37,000 | ||
Other Assets: | |||
Cash restricted for building purposes [ Refer working note (1) ] | 100,000 | ||
Officer’s note receivable [ Refer working note (2) ] | 30,000 | ||
Land held for future building site [ Refer working note (4) ] | 250,000 | 380,000 | |
Total Assets | 4,949,000 | ||
Liabilities | |||
Current Liabilities: | |||
Accounts payable (5) | 119,800 | ||
Current instalments of long-term debt[ Refer working notes (6) & (7) ] | 200,000 | ||
Lawsuit liability | 80,000 | ||
Income taxes payable (8) | 21,200 | ||
Deferred tax liability | 5,000 | ||
Total current liabilities | 426,000 | ||
Long-Term Debt: | |||
Mortgage payable (6) | 800,000 | ||
Notes payable (7) | 400,000 | ||
Deferred tax liability | 23,000 | ||
Total long-term debt | 1,223,000 | ||
Total Liabilities | 1,649,000 | ||
Shareholders’ Equity: | |||
Contributed Capital: | |||
Common stock, authorized 100,000 shares of $50 par value; issued 40,000 shares; outstanding 39,800 shares (9) | 2,000,000 | ||
Additional paid-in capital [ Refer working note (9) ] | 231,000 | ||
Total paid-in capital | 2,231,000 | ||
Retained earnings | 1,075,400 | ||
Total | 3,306,400 | ||
Less: Cost of treasury stock capital [ Refer working note (3) ] | (6,400) | ||
Total Shareholders’ Equity | 3,300,000 | ||
Total Liabilities and Shareholders’ Equity | 4,949,000 |
Table (1)
Therefore, the total of assets and total liabilities and shareholders’ equity equals to $4,949,000...
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