Problem 5-5

Presented below is the balance sheet of Sargent Corporation for the current year, 2017.

AYAYAI CORPORATION BALANCE SHEET DECEMBER 31, 2017
Current assets		$ 486,140		Current liabilities		$ 381,140
Investments		641,140		Long-term liabilities		1,001,140
Property, plant, and equipment		1,721,140		Stockholders equity		1,771,140
Intangible assets		305,000				$3,153,420
		$3,153,420

The following information is presented.

1.		The current assets section includes cash $151,140, accounts receivable $171,140 less $11,140 for allowance for doubtful accounts, inventories $181,140, and unearned rent revenue $6,140. Inventory is stated on the lower-of-FIFO-cost-or-market.
2.		The investments section includes the cash surrender value of a life insurance contract $41,140; investments in common stock, short-term $81,140 and long-term $271,140; and bond sinking fund $247,720. The cost and fair value of investments in common stock are the same.
3.		Property, plant, and equipment includes buildings $1,041,140 less accumulated depreciation $361,140, equipment $451,140 less accumulated depreciation $181,140, land $501,140, and land held for future use $270,000.
4.		Intangible assets include a franchise $166,140, goodwill $101,140, and discount on bonds payable $37,720.
5.		Current liabilities include accounts payable $141,140, notes payable-short-term $81,140 and long-term $121,140, and income taxes payable $37,720.
6.		Long-term liabilities are composed solely of 7% bonds payable due 2025.
7.		Stockholders equity has preferred stock, no par value, authorized 200,000 shares, issued 71,140 shares for $426,840, and common stock, $1.00 par value, authorized 400,000 shares, issued 101,140 shares at an average price of $10. In addition, the corporation has retained earnings of $332,900.

AYAYAI CORPORATION Balance Sheet Assets