E5-7 (LO 3) Current Assets Section of the Balance Sheet

Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2017.

Inventory (finished goods)

$52,000

Cost of Goods Sold

$2,100,000

Unearned Service Revenue

90,000

Notes Receivable

40,000

Equipment

253,000

Accounts Receivable

161,000

Inventory (work in process)

34,000

Inventory (raw materials)

207,000

Cash

37,000

Supplies Expense

60,000

Debt Investments (short-term)

31,000

Allow. for Doubtful Accounts

12,000

Customer Advances

36,000

Licenses

18,000

Restricted Cash for Plant Expansion

50,000

Additional Paid-in Capital

88,000

Treasury Stock

22,000

The following additional information is available.

1. Inventories are valued at lower-of-cost-or-market using LIFO.

2. Equipment is recorded at cost. Accumulated depreciation, computed on a

straight-line basis, is $50,600.

3. The short-term investments have a fair value of $29,000. (Assume they are trading

securities.)

4. The notes receivable are due April 30, 2019, with interest receivable every April 30.

The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2017.)

5. The allowance for doubtful accounts applies to the accounts receivable. Accounts

receivable of $50,000 are pledged as collateral on a bank loan.

6. Licenses are recorded net of accumulated amortization of $14,000.

7. Treasury stock is recorded at cost.

Instructions

Prepare the current assets section of Yasunari Kawabata Companys December 31, 2017, balance sheet, with appropriate disclosures.