Question
P5-4 (Preparation of a Corrected Balance Sheet) BALANCE SHEET DECEMBER 31, 2014 Goodwill (Note 2) 120,000 Buildings (Note 1) 1,640,000 Inventory 312,100 Land 950,000 Accounts
P5-4 (Preparation of a Corrected Balance Sheet) BALANCE SHEET
DECEMBER 31, 2014
Goodwill (Note 2) 120,000
Buildings (Note 1) 1,640,000
Inventory 312,100
Land 950,000
Accounts receivable 950,000
Treasury stock (50,000 shares) 170,000
Cash on hand 87,000
Assets allocated to trustee for plant expansion
Cash in bank 70,000
Debt ivnestments (held-to-maturity) 1380,000
$3,663,000
Equities
Noes payable (note 3) 600,000
Common stock, authorized and issued, 1,000,000 shares, no par 1,150,000
Retained earnings 803,000
Noncontrolling interest 55,000
Appreciation capital (Note 1) 570,000
Income tax payable 75,000
Rserve for depreciation recorded to date on the building 410,000
$3,663,000
Note 1: Buildings are stated at cost, except for one building that was recorded at appraised value. The excess of appraisal value over cost was $570,000. Depreciation has been recorded based on cost.
Note 2: Goodwill in the amount of $120,000 was recognized because the company believed that book value was not an accurate representation of the fair value of the company. The gain of $120,000 was credited to Retained Earnings.
Note 3: Notes payable are long-term except for the current installment due of $100,000 Note 4: Restricted cash and debt investments consist of capital allocated to a trustee for plant expansion.
Instructions
Prepare a corrected classified balance sheet in good form. The notes above are for information only. **I have spent over 5 hours on this and cannot get the stupid thing to balance. If you could explain why it doesn't balance when I add (or leave out) the Appraisal value of $570,000, and depreciation, and goodwill. Thank you very much for your time.
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