Illini Company, Inc.
Balance Sheet
as of 12/31/20X0
Assets
Current Assets:
Cash			$1,500,000
Accounts receivable, net			18,000
Inventory			50,000
Total current assets			1,568,000
Equipment			90,000
Goodwill			20,000
Total assets			$1,678,000
Liabilities and shareholders\' equity
Shareholders\' equity:
Common stock, 20,000 shares outstanding, $1 par			$20,000
Additional paid-in capital			280,000
Retained earnings			1,378,000
Total shareholders\' equity			1,678,000
Total liabilities and shareholders\' equity			$1,678,000

• Note that all additional paid-in capital (APIC) sub-accounts (e.g., APIC-options and APIC-treasury stock), if any, are tracked in the “Additional paid-in capital” account on the Balance Sheet.
• Illini provides a one-year warranty for one of its products. Based on industry experience, the estimated total warranty costs are 6% of sales. Sales of the product in 20X1 and 20X2 are $350,000 and $400,000, respectively. Actual warranty claims in 20X1 and 20X2 are $10,000 and $30,000, respectively. Out of the $30,000 claims in 20X2, $12,000 is related to the 20X1 sale.