Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

E5-5

Expert-verified
Intermediate Accounting (Kieso)
Found in: Page 241

Short Answer

(Preparation of a Corrected Balance Sheet) Uhura Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.

UHURA Company

Balance Sheet

For the year ended 2017

Current assets

Cash

$230,000

Accounts receivables (Net)

340,000

Inventory (Lower of average cost or market)

401,000

Equity investment (Trading)

140,000

Property, Plant and Equipment

Building (net)

570,000

Equipment (net)

160,000

Land held for future use

175,000

Intangible assets

Goodwill

80,000

Cash surrender value of life insurance

90,000

Prepaid expenses

12,000

Current liabilities

Account payable

135,000

Note payable

125,000

Pension obligation

82,000

Rent payable

49,000

Premium on bond payable

53,000

Long-term Liabilities

Bond payable

500,000

Stockholders equity

Common stock $1 par, authorized 400,000 shares, issued 290,000

290,000

Additional paid in capital

160,000

Retained earnings

Instructions

Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $160,000 and for the equipment, $105,000. The allowance for doubtful accounts has a balance of $17,000. The pension obligation is considered a long-term liability.

Both sides of the balance sheet total $1,821,000.

See the step by step solution

Step by Step Solution

Definition of Pension

The steady income received by a retired individual from the plan is known as a pension. The individual contributes a part of their salary during their working life to receive this amount after retirement.

Classified Balance sheet

UHURA Company
Balance Sheet
For the year ended 2017

Current assets

Cash

$230,000

Accounts receivables

$357,000

340,000

Less: allowance for doubtful accounts

(17,000)

Inventory (Lower of average cost or market)

401,000

Equity investment (Trading)

140,000

Prepaid expenses

12,000

Cash surrender value of life insurance

90,000

Investment

Land held for future use

175,000

Property, Plant and Equipment

Building

730,000

570,000

Less: Accumulated depreciation – building

(160,000)

Equipment

265,000

160,000

Less: Accumulated depreciation - equipment

(105,000)

Intangible assets

Goodwill

80,000

Total assets

1,821,000

Current liabilities

Account payable

135,000

Note payable

125,000

Rent payable

49,000

Long-term Liabilities

Bond payable

500,000

Premium on bond payable

53,000

Pension obligation

82,000

Total liabilities

944,000

Stockholders equity

Common stock $1 par, authorized 400,000 shares, issued 290,000

290,000

Additional paid-in capital

160,000

Retained earnings

427,000

Total liabilities and stockholder’s equity

$1,821,000

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.