Miscellaneous Accruals-Other accruals not separately classified amount to $75,000 as of March 31, 2015. Dividends-On March 15, 2015, Balzac's board of directors declared a cash dividend of $.40 per common share and a 10% common stock dividend. Both dividends were to be distributed on April 12, 2015, to the common stockholders of record at the close of business on March 31, 2015. Data regarding Balzac common stock are as follows: 4. 5. Par Value Number of shares issued and outstanding $5 per share 3,000,000 shares Market values of common stock March 15, 2015 March 31, 2015 April 12, 2015 $22.00 per share 21.50 per share 22.50 per share Instructions: Prepare the liabilities section of the balance sheet and appropriate notes to the statement for Balzac Inc as of March 31, 2015, as they should appear in its annual report to the stockholders. Write the entries which would be made over the life of the bonds and the dividend declarations. Include an analysis of the notes payable and warranty account. Comprehensive Liability Problem-Balance Sheet Presentation Balzac Inc has been producing quality children's apparel for more than 25 years. The company's fiscal year runs from April 1 to March 31. The following information relates to the obligations of Balzac as of March 31, 2015. Bonds Payable-Balzac issued $5,000,000 of 11% bonds on July 1, 2009, at 96 which yielded proceeds of $4,800,000 The bonds will mature on July 1, 2019. Interest is paid semiannually on July 1 and January 1. Balzac uses the straight-line method to amortize the bond discount. Notes Payable -Balzac has signed several long-term notes with financial institutions and insurance companies. The maturities of these notes are given below. The total unpaid interest for all of these notes amount to $210,000 on March 31, 2015. April 1, 2015 July 1, 2015 October 1, 2015 January 1, 2016 March 31, 2017 April 1, 2017-March 31, 2018 April 1, 2018-March 31, 2019 April 1, 2019-March 31, 2020 April 1, 2020-March 31, 2021 Amount Due 200,000 300,000 150,000 150,000 600,000 500,000 700,000 400,000 $3,500,000 Estimated Warranties -Balzac has a one-year product warranty on some selected items in its product line. The estimated warranty liability on sales made during the 2013-2014 fiscal year and still outstanding as of March 31, 2014 amounted to $84,000. The warranty costs on sales made from April 1, 2014 through March 31, 2015 are estimated at $210,000. The actual warranty costs incurred during the current 2014-15 fiscal year are as follows: Warranty claims honored on 2013-14 sales Warranty claims honored on 2014-15 sales Total warranty claims honored 84,000 95,000 $179,000 Other Information: 1 Trade payables -Accounts Payable for supplies, goods and services amounted to $370,000 as of March 31, 2015. 2. Payroll Related items-Outstanding obligations related to Balzac's payroll as of March 31, 2015 are: Accrued Salaries and Wages FICA Taxes State & Federal Income Tax Withheld-Employees Other Payroll Deductions $150,000 22,000 25,000 3. Taxes The following taxes incurred but not due until the next fiscal year are: $310,000 125,000 182,000 State and Federal Income Taxes Property Taxes Sales and Use Taxes