Solutions to in-class HW Week 6 - EXERCISE52(1520minutes 1...

EXERCISE 5-2 (15–20 minutes)
1. h. 11. b.
2. d. 12. f.
3. f. 13. a.
4. f. 14. h.
5 c. 15. c.
6. a. 16. b.
7. f. 17. a.
8. g. 18. a.
9. a. 19. g.
10. a. 20. f.
EXERCISE 5-3 (15–20 minutes)
1. a. 10. f.
2. b. 11. a.
3. f. 12. f.
4. a. 13. a. or e. (preferably a.)
5 f. 14. c. and N.
6. h. 15. f.
7. i. 16. X.
8. d. 17. f.
9. a. 18. c.
EXERCISE 5-4 (30–35 minutes)
Denis Savard Inc.
Balance Sheet
December 31, 20–
Assets
Current assets
1

Cash .............................................................. $XXX
Less: Cash restricted for plant
expansion ............................................. XXX $XXX
Accounts receivable ....................................... XXX
Less:  Allowance  for doubtful
accounts ............................................... XXX XXX
Notes receivable ............................................ XXX
Receivables—officers .................................... XXX
Inventories
Finished goods ........................................ XXX
Work in process ....................................... XXX
Raw materials .......................................... XXX XXX
Total current assets ........................... $XXX
Long-term investments
Preferred stock investments .......................... XXX
Land held for future plant site ........................ XXX
Restricted cash (plant expansion) .................. XXX
Total long-term investments ............... XXX
Property, plant, and equipment
Buildings ........................................................ XXX
Less:   Accum.   depreciation—
buildings ................................................ XXX XXX
Intangible assets
Copyrights ...................................................... XXX
Total assets ............................................ $XXX
Liabilities and Stockholders’ Equity
Current liabilities
Salaries and wages payable ................................. $XXX
Notes payable, short-term .................................... XXX
Unearned subscriptions revenue .......................... XXX
Unearned rent revenue ......................................... XXX
Total current liabilities ..................................... $XXX
2

Long-term debt
Bonds payable, due in four years ......................... $XXX
Less: Discount on bonds payable ......................... (XXX ) XXX
Total liabilities ................................................. XXX
Stockholders’ equity
Capital stock:
Common stock ................................................ XXX
Additional paid-in capital:
Paid-in capital in excess of par
(common stock) ............................................ XXX
Total paid-in capital ................................... XXX
Retained earnings ................................................. XXX
Total paid-in capital and
retained earnings ................................... XXX
Less:  Treasury stock, at cost ......................... (XXX )
Equity attributable to Denis Savard, Inc ................ XXX
Equity attributed to noncontrolling interest ............ XXX
Total stockholders’ equity ......................... XXX
Total   liabilities   and
stockholders’ equity ............................... $XXX
Note: An assumption made here is that cash included the restricted cash
for plant expansion. If it did not, then a subtraction from cash would not
be necessary or the cash balance would be “grossed up” and then the
restricted cash for plant expansion deducted.
EXERCISE 5-7 (15–20 minutes)
Current assets
Cash ....................................................................... $  87,000*
Less: Restricted cash (plant expansion) ................ 50,000 $  37,000
Trading   securities   at   fair   value   (cost,
$31,000) .............................................................. 29,000
Accounts receivable (of which $50,000 is
pledged as collateral on a bank loan) ................. 161,000
Less: Allowance for doubtful accounts ................... 12,000 149,000
3