Question
Presented below is the balance sheet of Sargent Corporation for the current year, 2014.
The following information is presented.
Prepare a balance sheet in good form, adjusting the amounts in each balance sheet classification as affected by the information given above. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)
SARGENT CORPORATION
BALANCE SHEET
DECEMBER 31, 2014
SARGENT CORPORATION
Balance Sheet
December 31, 2014
Assets
Liabilities and Stockholders' Equity
SARGENT CORPORATION
BALANCE SHEET
DECEMBER 31, 2014
Current assets $ 486,890 Current liabilities $ 381,890 Investments 641,890 Long-term liabilities 1,001,890 Property, plant, and equipment 1,721,890 Stockholders’ equity 1,771,890 Intangible assets 305,000 $3,155,670 $3,155,670
1. The current assets section includes cash $151,890, accounts receivable $171,890 less $11,890 for allowance for doubtful accounts, inventories $181,890, and unearned rent revenue $6,890. Inventory is stated on the lower-of-FIFO-cost-or-market.
2. The investments section includes the cash surrender value of a life insurance contract $41,890; investments in common stock, short-term (trading) $81,890 and long-term (available-for-sale) $271,890; and bond sinking fund $246,220. The cost and fair value of investments in common stock are the same.
3. Property, plant, and equipment includes buildings $1,041,890 less accumulated depreciation $361,890; equipment $451,890 less accumulated depreciation $181,890; land $501,890; and land held for future use $270,000.
4. Intangible assets include a franchise $166,890; goodwill $101,890; and discount on bonds payable $36,220.
5. Current liabilities include accounts payable $141,890; notes payable-short-term $81,890 and long-term $121,890; and income taxes payable $36,220.
6. Long-term liabilities are composed solely of 8% bonds payable due 2022.
7. Stockholders’ equity has preferred stock, no par value, authorized 200,000 shares, issued 71,890 shares for $431,340; and common stock, $1.00 par value, authorized 400,000 shares, issued 101,890 shares at an average price of $10. In addition, the corporation has retained earnings of $321,650.
SARGENT CORPORATION
Balance Sheet
December 31, 2014
Assets
$
$
:
$
:
:
$
Liabilities and Stockholders' Equity
$
$
$
:
$
Explanation / Answer
Presented below is the balance sheet of Sargent Corporation for the current year