Exam 1 Key - 3-39 Brockbank Research Corp. Balance Sheet...

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Unformatted text preview: 3-39 Brockbank Research Corp. Balance Sheet 31-Dec-08 ASSETS CURRENT Cash Accounts Receivable-Trade (less $1,731 Allowance for bad debts) Insurance claims receivables (note 2) Inventory (note 1a) Prepaid Insurance TOTAL CURRENT ASSETS NONCURRENT ASSETS INVESTMENTS AND OTHER ASSETS Insurance claims receivables (note 2) Investment in Unconsolidated subsidiary Cash fund for bond retirement PROPERTY PLANT AND EQUIPMENT Land Equipment-Automotive Equipment-Furniture Fixtures and Store Leasehold Improvements (note 3) Accumulated Depreciation-Leasehold improvements and Equipment INTANGIBLES Franchises Patents TOTAL NONCURRENT ASSETS TOTAL ASSETS (note 4) LIABILITIES $25,600 56,000 80,000 201,620 5,500 368,720 CURRENT LIABILITIES Notes payable-trade Notes payable-bank Accounts payable Dividends payable Profit sharing-payroll-and Vacation payable TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES Long Term lease obligations Deferred Income Tax Liability TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES $40,000 80,000 3,600 6,000 132,800 769,000 65,800 (579,472) 12,150 57,402 587,280 $956,000 OWNERS EQUITY CONTRIBUTED CAPITAL Common Stock ($1 par, 35000 issued and outstanding, 100,000 authorized) Additional paid-in capital Retained Earnings TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 3-39 arch Corp. heet -08 LIABILITIES CURRENT LIABILITIES Notes payable-trade Notes payable-bank Accounts payable Dividends payable Profit sharing-payroll-and Vacation payable TOTAL CURRENT LIABILITIES NONCURRENT LIABILITIES Long Term lease obligations Deferred Income Tax Liability TOTAL NONCURRENT LIABILITIES TOTAL LIABILITIES 63,540 12,000 32,160 37,500 40,000 $185,200 200,000 45,000 245,000 430,200 OWNERS EQUITY CONTRIBUTED CAPITAL Common Stock ($1 par, 35000 issued and outstanding, 100,000 authorized) Additional paid-in capital Retained Earnings TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 35,000 265,000 225,800 525,800 $956,000 3-39 BROCKBANK RESEARCH CORPORATION NOTES TO FINANCIAL STATEMENTS—YEAR ENDED DECEMBER 31, 2008 1 Summary of significant accounting principles a Inventories are stated at the lower of cost or market. Cost is calculated by the specific identification method. b Depreciation is computed using the straight-line method over the estimated useful lives of the assets. c The costs of an exclusive franchise to import a foreign company’s ball bearings and a related patent license are being amortized on the straight-line method over their remaining lives of 10 years and 15 years, respectively. 2 Insurance claims, based on the opinion of an independent insurance adjustor, are for property damages at the central warehouse. These claims have been classified as current and noncurrent based on the company’s estimate of probable settlement dates. The company leases all of its buildings. Rental lease commitments are $50,000 per year for the next 10 years. All leases are operating leases. The company is currently in litigation over a $13,000 overpayment of income taxes. In the opinion of counsel, the claim is valid, but no legal right to the overpayment exists as of the date of the report. 3 4 5 The company is contingently liable for $12,000 of guaranteed notes. 3-39 and 15 years, respectively. t based on the company’s estimate of eport. ...
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