Presented below is the balance sheet of Stephen King Corporation for the current year, 2008. The following
Question:
Presented below is the balance sheet of Stephen King Corporation for the current year, 2008.
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The following information is presented.
1. The current assets section includes: cash $114,000, accounts receivable $170,000 less $10,000 for allowance for doubtful accounts, inventories $180,000, and unearned revenue $5,000. Inventories are stated on the lower of FIFO cost or market.
2. The investments section includes: the cash surrender value of a life insurance contract $40,000; investments in common stock, short-term (trading) $80,000 and long-term (available-for-sale) $270,000; and bond sinking fund $250,000. The cost and fair value of investments in common stock are the same.
3. Property, plant, and equipment includes: buildings $1,040,000 less accumulated depreciation $360,000; equipment $450,000 less accumulated depreciation $180,000; land $500,000; and land held for future use $270,000.
4. Intangible assets include: a franchise $165,000; goodwill $100,000; and discount on bonds payable $40,000.
5. Current liabilities include: accounts payable $90,000; notes payable short-term $80,000 and long-term $120,000; and taxes payable $40,000.
6. Long-term liabilities are composed solely of 10% bonds payable due to 2016.
7. Stockholders' equity has: preferred stock, no par value, authorized 200,000 shares, issued 70,000 shares for $450,000; and common stock, $1 par value, authorized 400,000 shares, issued 100,000 shares at an average price of $10. In addition, the corporation has retained earnings of $320,000.
Instructions
Prepare a balance sheet in good form, adjusting the amounts in each balance sheet classification as affected by the information given above.
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Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Payable
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Step by Step Answer:
Stephen King Corporation Balance Sheet December 31 2008 Assets Current assets Cash 114000 Trading se...View the full answer
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
