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ABC Corporation
Balance Sheet
December 31,2018
Assets $ $
Current assets
Cash ____
Market securities ____
Inventory ____
Prepaid expense ____
Equity investment trading ____
Account receivable ____
Less: Allowance for doubtful account receivable (___)
Total current assets ____
Other assets ____
Long-term investment
Cash surrender value of life insurance ____
Construction work in progress ____
Investment and special fund ____
Long-term investment in stock ____
Land held for future use ____
Other assets (long term) ____
Fixed assets
Tangible assets:
Land ____
Property, plant and equipment ____
Building ____
Machinery ____
Less: Accumulated Depreciation (___) ____
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Intangible assets:
Good will ____
Franchise ____
Patents
Less: Amortization (___) ____
Total Assets ____
Liabilities $ $
Current liabilities
Accrued payable ____
Notes payable ____
Dividend payable ____
Accounts payable ____
Short term note payable ____
Current installment of long-term debt ____
Unearned transportation revenue ____
Long-term debt
Bond payable ____
Mortgages payable ____
Deferred income taxes liability (long-term) ____
Less: Unamortized/ discount on bond 10% (___) ____
Pension obligation (long term) ____
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Balance Sheet
Q No. 1 The following information is available on the V Corporation:
BALANCE SHEET AS OF DECEMBER 31, 2020 (in thousands)
Cash and marketable securities $500 Accounts payable $ 400
Accounts receivable ? Bank loan ?
Inventories ? Accruals 200
Current assets ? Current liabilities ?
Long-term debt 2,650
Net fixed assets ? Common stock and retained earnings 3,750
Total assets ? Total liabilities and equity ?
OTHER INFORMATION
Current ratio 3 to 1
Depreciation $500
Net profit margin 7%
Total liabilities/shareholders’ equity 1 to 1
Average collection period 45 days
Inventory turnover ratio 3 to 1
• Assuming that sales and production are steady throughout a 360-day year.
• complete the balance sheet for V Corporation. ( Vahn Horn)
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Q No. 2 The following accounts and December 31, 2020, balances of New Jersey Optical
Corporation are arranged in no particular order.
Requirements
1. Prepare the company’s balance sheet in account format at December 31, 2020.
(Financial Accounting)
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Q No. 3 Presented below is the trial balance of J N Corporation at December 31, 2020.
Cash $ 197,000
Sales $ 8,100,000
Trading Securities (at cost, $145,000) ------------------------------------------ 153,000
Cost of Goods Sold 4,800,000
Long-term Investments in Bonds 299,000
Long-term Investments in Stocks 277,000
Short-term Notes Payable 90,000
Accounts Payable 455,000
Selling Expenses 2,000,000
Investment Revenue 63,000
Land 260,000
Buildings 1,040,000
Dividends Payable 136,000
Accrued Liabilities 96,000
Accounts Receivable 435,000
Accumulated Depreciation—Buildings 152,000
Allowance for Doubtful Accounts 25,000
Administrative Expenses 900,000
Interest Expense 211,000
Inventories 597,000
Extraordinary Gain 80,000
Long-term Notes Payable 900,000
Equipment 600,000
Bonds Payable 1,000,000
Accumulated Depreciation—Equipment 60,000
Franchise 160,000
Common Stock ($5 par) 1,000,000
Treasury Stock --------------------------------------------------------------------- 191,000
Patent 195,000
Retained Earnings ----------------------------------------------------------------- 78,000
Additional Paid-in Capital 80,000
• Instructions prepare a balance sheet at December 31, 2020, for John Nalezny
Corporation. Ignore income taxes.
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Q No 4 U Company has decided to expand its operations. The bookkeeper recently
completed the balance sheet presented below in order to obtain additional funds for
expansion.
U COMPANY BALANCE SHEET
FOR THE YEAR ENDED 2020
Current assets
Cash $230,000
Accounts receivable (net) 340,000
Inventories at lower of average cost or market 401,000
Equity investments Trading at cost (fair value $120,000) -------------------- 140,000
Property, plant, and equipment Building (net) 5 70,000
Office 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
Accounts payable 135,000
Notes payable (due next year) 125,000
Pension obligation 82,000
Rent payable 49,000
Premium on bonds payable 53,000
Long-term liabilities
Bonds payable 500,000
Stockholders’ equity Common stock, $1.00 par, authorized
400,000 shares, issued 290,000 290,000
Additional paid-in capital 160,000
Retained earnings ------------------------------------------------------------------ ?
• Prepare a revised balance sheet given the available information.
• Assume that the accumulated depreciation balance for the buildings 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.
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Q No– 5 The adjusted trial balance of Side Kicks Company and other related information
for the year 2007 are presented
SIDE KICKS COMPANY ADJUSTED TRIAL BALANCE
DECEMBER 31, 2007
Cash $ 41,000
Accounts Receivable 1 63,500
Allowance for Doubtful Accounts $ 8,700
Prepaid Insurance 5,900
Inventory 308,500
Long-term Investments 339,000
Land 85,000
Construction Work in Progress 124,000
Patents 36,000
Equipment 400,000
Accumulated Depreciation of Equipment 140,000
Unamortized Discount on Bonds Payable 20,000
Accounts Payable 148,000
Accrued Expenses 49,200
Notes Payable 94,000
Bonds Payable 400,000
Common Stock 500,000
Premium on Common Stock 45,000
Retained Earnings 138,000
Additional information:
1. The LIFO method of inventory value is used.
2. The cost and fair value of the long-term investments that consist of stocks and bonds
is the same.
3. The amount of the Construction Work in Progress account represents the costs
expended to date on a building in the process of construction. (The company rents factory
space at the present time.) The land on which the building is being constructed cost
$85,000, as shown in the trial balance.
4. The patents were purchased by the company at a cost of $40,000 and are being
amortized on a straight-line basis.
5. Of the unamortized discount on bonds payable, $2,000 will be amortized in 2008.
6. The notes payable represent bank loans that are secured by long-term investments
carried at $120,000. These bank loans are due in 2008.
7. The bonds payable bear interest at 8% payable every December 31, and are due
January 1, 2018.
8. 600,000 shares of common stock of a par value of $1 were authorized, of which
500,000 shares were issued and outstanding.
Instructions Prepare a balance sheet as of December 31, 2007, so that all important
information is fully disclosed
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Q No. 6 The bookkeeper for Geronimo Company has prepared the following balance sheet as of
July 31, 2020.
Total $274,500
1. Cash includes $1,200 in a petty cash fund and $15,000 in a bond sinking fund.
The net accounts receivable balance is comprised of the following two items: (a) accounts receivable
2. $44,000 and (b) allowance for doubtful accounts $3,500.
Inventory costing $5,300 was shipped out on consignment on July 31, 2014. The ending inventory
balance does not include the consigned goods. Receivables in the amount of $5,300 were recognized
3. on these consigned goods.
Income taxes payable of $6,000 were accrued on July 31. Geronimo Company, however, had set up a
cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset
5. against the income taxes payable amount.
• Prepare a corrected classified balance sheet as of July 31, 2020, from the available
information, adjusting the account balances using the additional information.
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Q No 7. The following information was obtained from the accounts of Airlines International
dated December 31, 2020.
Cash 28,837
Common stock (par $0.50, authorized 20,000 shares, issued 14,304 shares) 7,152
Inventory 16,643
Unearned transportation revenue (airline tickets expiring within one year) 6,808
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Q No- 8. The following information was obtained from the accounts of Lukes, Inc., as of
December 31, 2020. It is presented in scrambled order.
Common stock, no par value, 10,000 shares authorized, 5,724 shares issued $ 3,180
Buildings 75,000
Land 11,000
Cash 3,000
Inventory 54,000
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Q No-9. The following information was obtained from the accounts of Alleg, Inc., as of
December 31, 2020. It is presented in scrambled order.
Common stock, authorized 21,000 shares at $1 par value, issued 10,000 shares $10,000
Cash 13,000
Inventory 30,000
Goodwill 8,000
Patents 10,000
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Q No-10. The following is the balance sheet of Ingram Industries:
Investments:
Deferred charges:
Stockholders’ equity:
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Q No-11. The following is the balance sheet of Rubber Industries:
RUBBER INDUSTRIES
Balance Sheet
For the Year Ended December 31, 2020
Assets
Current assets:
Cash $ 50,000
Marketable equity securities 19,000
Accounts receivable, net 60,000
Inventory 30,000
Treasury stock 20,000
Land and buildings, net 160,000
Investments:
Short-term notes 20,000
Other assets:
Supplies 4,000
Liabilities and Stockholders’ Equity
Liabilities:
Bonds payable $123,000
Accounts payable 40,000
Wages payable 10,000
Stockholders’ equity:
Common stock ($20 par, 20,000 shares
authorized, 6,000 shares outstanding) 120,000
Retained earnings 50,000
Redeemable preferred stock 20,000
• Required Indicate your criticisms of the balance sheet.
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Q No 12. The following is the balance sheet of McDonald Company:
McDonald COMPANY
December 31, 2020
Assets
Current assets:
Cash (including $10,000 restricted for payment of note) $ 40,000
Assets
Marketable equity securities 20,000
Accounts receivable, less allowance for doubtful accounts of $12,000 70,000
Inventory 60,000
Plant assets:
Land $ 40,000
Buildings, net 100,000
Equipment $80,000
Less: Accumulated depreciation 20,000 60,000
Patent 20,000
Organizational costs 15,000
Other assets:
Prepaid insurance 5,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 60,000
Wages payable 10,000
Notes payable, due July 1, 2012 20,000
Bonds payable, due December 2016 100,000
Dividends payable 4,000
Deferred tax liability, long term 30,000
Stockholders’ equity:
Common stock ($10 par, 10,000 shares authorized, 5,000 shares outstanding) $ 50,000
Retained earnings 156,000
• Required Indicate your criticisms of the balance sheet and briefly explain the
proper treatment of any item criticized.
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Q No. 13. With the following ratios and further information given below, prepare
Balance sheet as on 31st December, 2020.
Fixed assets $ 500,000
Closing stock 50,000
Stock turnover ratio 10 Times
Gross profit ratio 25%
Net profit ratio 20%
Fixed assets/ total current assets 5/7
Fixed assets/ capital 5/4
Capital to total liabilities ½
Net profit/ capital 1/5.
Q No. 14. A firm has owner’s equity of $ 200000 and the ratios for the firm are:
Balance Sheet
Assets $
Cash ?
Inventory ?
Total current assets ?
Fixed assets ?
Total assets ?
Liabilities:
Short term debts ?
Long term debts ?
Total debts ?
Shareholders’ equity ?
Total shareholders’ equity and liabilities. ?
Best of luck.
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