510chapter5fall2009after10152009

510chapter5fall2009after10152009 - C hapte 5: BalanceS e...

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Chapter 5: Balance Sheet and Statement of Cash Flows
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What’s Important Usefulness/limitations of balance sheet How elements are classified in the balance sheet Balance sheet format Techniques of disclosure Purpose/content/format of statement of cash flows
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E5-5 Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation for the building is $160,000 and for the office equipment , $105,000. The allowance for doubtful accounts has a balance of $17,000. The pension obligation is considered a long term liability. Bruno Company Balance Sheet For the year ended 2010 Current Assets Cash $260,000 Accounts Receivable (net) 340,000 Inventories at lower of average cost or market 401,000 Trading securities—at cost (fair value $120,00) 140,000
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E5-5 (cont’d) Property, plant and equipment Current Liabilities Building (net) 570,000 Accounts payable 135,000 Office equipment (net) 160,000 Notes Payable (due nxt yr) 125,000 Land held for future use 175,000 Pension obligation 82,000 Intangible Assets Rent Payable 49,000 Goodwill 80,000 Premium on bonds 53,000 Cash surrender –life ins 90,000 Long term Liabilities Prepaid expenses 12,000 Bonds Payable 500,000 Stockholders’ Equity Common stock, $1 par 290,000 Additional paid in capital 180,000 Retained Earnings ?
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E5-9 Restate the current assets and liabilities sections of the balance sheet in accordance with good accounting practice (Assume both accounts receivable and accounts payable are recorded at gross). 1. January 2011 cash disbursements entered as of December 2010 included payments of accounts payable in the amount of $35,000, on which a cash discount of 2% was taken. 2. The inventory included $27,000 of merchandise that had been received at December 31 but for which no purchase invoices had been received or entered. Of this amount, $12,000 had been received on consignment, the remainder was purchased f.o.b. destination , terms 2/10 n/30. 3. Sales for the first four days in January 2011 in the amount of $30,000 were entered in the sales book as of December 31, 2010. Of these, $21,500 were sales on account and the remainder were cash sales. 4. Cash, not including cash sales, collected in January 2011 and entered as of December 31, 2010, totaled $35,324. Of this amount, $23,324 was received on account after cash discounts of 2% had been deducted; the remainder represented the proceeds of a bank loan.
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E5-9 (cont’d) Agincourt Company Balance Sheet (Partial) December 31, 2010 Cash $40,000 Accounts Receivable 89,000 Allowance for Doubtful 7,000 82,000 Inventories 171,000 Prepaid expenses 9,000 $302,000 Accounts Payable $61,000 Notes Payable 67,000 $128,000
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To provide relevant information about the cash receipts and cash payments of an enterprise during a period. The statement provides answers to the following
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This note was uploaded on 12/29/2009 for the course ACC 5100 taught by Professor Andrews during the Fall '09 term at Wayne State University.

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510chapter5fall2009after10152009 - C hapte 5: BalanceS e...

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