Comprehensive Problem 3 Part 5: Note: You must complete parts 1, 2, 3, and 4 of this comprehensive problem before completing part 5. Based on the following information and the post-closing trial balance that follows, prepare a balance sheet in report form at December 31 of the current year: The merchandise inventory is stated at cost by the LIFO method. The product warranty payable is a current liability. Vacation pay payable: Current liability $7,140 Long-term liability 3,360 The unfunded pension liability is a long-term liability. Notes payable: $ 70,000 Current liability Long-term liability 630,000 Kornett Company Post-Closing Trial Balance December 31, 20Y5 Account Title Debit Balances Credit Balances Petty Cash 4,500 Petty Cash 4,500 Cash 243,960 Notes Receivable 100,000 470,000 Accounts Receivable 16,000 Allowance for Doubtful Accounts Inventory 320,000 Interest Receivable 1,875 Prepaid Insurance 45,640 Office Supplies 13,400 Land 654,925 Buildings 900,000 Accumulated Depreciation-Buildings 36,000 Office Equipment 246,000 Accumulated Depreciation-Office Equipment 44,000 Store Equipment 112,000 Accumulated Depreciation-Store Equipment 5,000 Mineral Rights 546,000 Accumulated Depletion 30,000 42,000 Patents Social Security Tax Payable 25,470 Social Security Tax Payable 25,470 Medicare Tax Payable 4,710 40,000 Employees Federal Income Tax Payable State Unemployment Tax Payable 270 Federal Unemployment Tax Payable 40 Salaries Payable 157,000 Accounts Payable 131,600 Interest Payable 28,000 Product Warranty Payable 76,000 Vacation Pay Payable 10,500 Unfunded Pension Liability 50,700 Notes Payable 700,000 Common Stock 500,000 Retained Earnings 1,845,010 3,700,300 3,700,300 Kornett Company Balance Sheet December 31, 20Y5 Assets Assets Current assets: Petty cash v 4,500 Cash v 243,960 Notes receivable v 100,000 Accounts receivable v 470,000 Allowance for doubtful accounts 16,000 Accounts receivable, net v 454,000 Inventory v 320,000 Interest receivable v 1,875 V Prepaid insurance v 45,640 Office supplies v 13,400 Total current assets 1,183,37 Property, plant, and equipment: Land v 654,925 %24 654,925 Buildings 900,000 36,000 v Accumulated depreciation-buildings v Book value-buildings v 864,000 Office equipment v 246,000 v 44,000 V Accumulated depreciation-office equipment v Book value-office equipment v 202,000 Store equipment v 112,000 5,000 v Accumulated depreciation-store equipment v Book value-store equipment v 107,000 Mineral rights v 546,000 v 30,000 v Accumulated depletion-mineral rights v Book value-mineral rights v 516,000 Total property, plant, and equipment Intangible assets: Intangible assets: Patents v 42,000 Total assets Liabilities Current liabilities: Social security tax payable v Medicare tax payable v Employees federal income tax payable v v State unemployment tax payable Federal unemployment tax payable v Salaries payable v Accounts payable v Interest payable v Product warranty payable v Vacation pay payable (current portion) v Notes payable (current portion) v Total current liabilities %24 Vacation pay payable (current portion) v Notes payable (current portion) Total current liabilities Long-term liabilities: Vacation pay payable v -10,500 x 50,700 v Unfunded pension liability v Notes payable -700,000 x Total long-term liabilities Total liabilities Stockholders' Equity Common stock v 500,000 1,845,01 Retained earnings v Total stockholders' equity 684,501 x Total liabilities and stockholders' equity 3,700,30 x
