Adjusted account balances and supplemental information for Brockbank Research Corp. as of December 31, 2002, are as follows:

Supplemental information:

(a) Depreciation is provided by the straight-line method over the estimated useful lives of the assets.

(b) Common stock is \($1\) par, and 35,000 of the 100,000 authorized shares were issued and are outstanding.

(c) The cost of an exclusive franchise to import a foreign company's ball bearings and a related patent license are being amortized on the straight-line method over their remaining lives: franchise. 10 years; patents, 15 years.

(d) Inventories are stated at the lower of cost or market; cost was determined by the specific identification method.

(e) Insurance claims based on the opinion of an independent insurance adjustory are for property damages at the central warehouse. These claims are estimated to be twothirds collectible in the following year and one-third collectible thereafter.
(f) The company leases all of its buildings from various lessors. Estimated fixed-lease obligations are \($50,000\) per year for the next 10 years. The leases do not meet the criteria for capitalization.

(g) The company is currently in litigation over a claimed overpayment of income tax of \($13,000\). In the opinion of counsel, the claim is valid. The company is contingently liable on guaranteed notes worth \($12,000\).

Instructions: 

Prepare a properly classified balance sheet. Include all notes and parenthetical notations necessary to properly disclose the essential financial data.

Transcribed Image Text:

Accounts Payable Accounts Receivable-Trade. Accumulated Depreciation-Leasehold Improvements and Equipment.. Additional Paid-In Capital.. $ 32,160 57,731 579,472 265,000 Allowance for Doubtful Accounts. Automotive Equipment. Cash Cash Fund for Bond Retirement. Common Stock. Deferred Income Tax Liability. Dividends Payable. Franchises Furniture, Fixtures, and Store Equipment 1,731 132,800 25,600 3,600 35,000 45,000 37,500 12,150 769,000