ANSWER KEY E5-12 - $1,000,000 Additional paid-in capital...

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ANSWER KEY John Nalezny Corporation Balance Sheet December 31, 2007 Assets Current assets Cash $197,000 Trading securities 153,000 Accounts receivable $435,000 Less: Allowance for doubtful accounts (25,000) 410,000 Inventories 597,000 Total current assets 1,357,000 Long-term investments Investments in bonds 299,000 Investments in stocks 277,000 Total long-term investments 576,000 Property, plant, and equipment Land 260,000 Buildings 1,040,000 Less: Accum. depreciation (152,000) 888,000
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Equipment 600,000 Less: Accum. depreciation (60,000) 540,000 Total property, plant, and equipment 1,688,000 Intangible assets Franchise 160,000 Patent 195,000 Total intangible assets 355,000 Total assets $3,976,000
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Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 455,000 Short-term notes payable 90,000 Dividends payable 136,000 Accrued liabilities 96,000 Total current liabilities $ 777,000 Long-term debt Long-term notes payable 900,000 Bonds payable 1,000,000 Total long-term liabilities 1,900,000 Total liabilities 2,677,000 Stockholder’s equity Paid-in capital Common stock ($5 par)
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Unformatted text preview: $1,000,000 Additional paid-in capital 80,000 1,080,000 Retained earnings* 410,000 Total paid-in capital and retained earnings 1,490,000 Less: Treasury stock (191,000 ) Total stockholders equity 1,299,000 Total liabilities and stockholders equity $3,976,000 *Computation of Retained Earnings: Sales $8,100,000 Investment revenue 63,000 Extraordinary gain 80,000 Cost of goods sold (4,800,000) Selling expenses (2,000,000) Administrative expenses (900,000) Interest expense (211,000 ) Net income $ 332,000 Beginning retained earnings $ 78,000 Net income 332,000 Ending retained earnings $410,000 Or ending retained earnings can be computed as follows: Total stockholders equity $1,299,000 Add: Treasury stock 191,000 Less: Paid-in capital 1,080,000 Ending retained earnings $ 410,000 Note to instructor: There is no dividends account. Thus, the 12/31/07 re-tained earnings balance already reflects any dividends declared....
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ANSWER KEY E5-12 - $1,000,000 Additional paid-in capital...

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