Problem 5-3 The adjusted trial balance of Vaughn Company and other related information for the year 2017 are presented as follows VAUGHN COMPANY ADJUSTED TRIAL BALANCE DECEMBER 31, 2017 Credit Debit $ 43,440 Cash 165,940 Accounts Receivable 9,050 Allowance for Doubtful Accounts 6,250 Prepaid Insurance 210,940 Inventory Equity Investments (long-term) 341,440 Land 87,440 Construction in Progress (building) 126,440 Patents 36,000 Equipment 402,440 Accumulated Depreciation-Equipment 240,350 Discount on Bonds Payable 20,000 Accounts Payable 150,440 Accrued Liabilities 51,640 Notes Payable 96,440 Bonds Payable 202,440 Common Stock 502,440 Paid-in Capital in Excess of Par-Common Stock 45,000 Retained Earnings 142,530 $1,440,330 $1,440,330 Additional information: 1. The LIFO method of inventory value is used 2. The cost and fair value of the long-term investments that consist of stocks and bonds is the same. The amount of the Construction in Progress account represents the costs expended to date on a building in the process of construction. (The company rents factory space at the present time.) The land on which the building is being constructed cost $87,440, as shown in the trial balance. The patents were purchased by the company at a cost of $40,000 and are being amortized on a straight-line basis. Of the discount on bonds payable, $2,000 will be amortized in 2018. 3. 4. 5. The notes payable represent bank loans that are secured by long-term investments carried at $122,440. These bank loans are due in 2018. The bonds payable bear interest at 8 % payable every December 31, and are due January 1, 2028. 600,000 shares of common stock of a par value of $1 were authorized, of which 502,440 shares were issued and outstanding. 6. 7. 8. Prepare a balance sheet as of December 31, 2017, so that all important information is fully disclosed. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment. Enter account name only and do not provide the descriptive information provided in the question.) VAUGHN COMPANY Ralance Sheet Assots Cost of Uncompleted Plant Facilities bies and Stockholders Esplty Question Attempts: 0 of 5 used