Question
The following are Pearl Corp.s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to
The following are Pearl Corp.s comparative balance sheet accounts at December 31, 2020 and 2019, with a column showing the increase (decrease) from 2019 to 2020.
| COMPARATIVE BALANCE SHEETS | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | Increase (Decrease) | |||||||
| Cash | $807,000 | $704,100 | $102,900 | ||||||
| Accounts receivable | 1,131,500 | 1,163,600 | (32,100 | ) | |||||
| Inventory | 1,844,100 | 1,714,200 | 129,900 | ||||||
| Property, plant, and equipment | 3,283,200 | 2,951,900 | 331,300 | ||||||
| Accumulated depreciation | (1,159,200 | ) | (1,041,000 | ) | (118,200 | ) | |||
| Investment in Myers Co. | 309,600 | 273,200 | 36,400 | ||||||
| Loan receivable | 250,900 | 250,900 | |||||||
| Total assets | $6,467,100 | $5,766,000 | $701,100 | ||||||
|
| |||||||||
| Accounts payable | $1,012,100 | $956,200 | $55,900 | ||||||
| Income taxes payable | 30,100 | 49,700 | (19,600 | ) | |||||
| Dividends payable | 79,600 | 99,300 | (19,700 | ) | |||||
| Lease liabililty | 391,600 | 391,600 | |||||||
| Common stock, $1 par | 500,000 | 500,000 | |||||||
| Paid-in capital in excess of parcommon stock | 1,495,400 | 1,495,400 | |||||||
| Retained earnings | 2,958,300 | 2,665,400 | 292,900 | ||||||
| Total liabilities and stockholders equity | $6,467,100 | $5,766,000 | $701,100 | ||||||
Additional information:
| 1. | On December 31, 2019, Pearl acquired 25% of Myers Co.s common stock for $273,200. On that date, the carrying value of Myerss assets and liabilities, which approximated their fair values, was $1,092,800. Myers reported income of $145,600 for the year ended December 31, 2020. No dividend was paid on Myerss common stock during the year. | |
| 2. | During 2020, Pearl loaned $290,900 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $40,000, plus interest at 10%, on December 31, 2020. | |
| 3. | On January 2, 2020, Pearl sold equipment costing $60,300, with a carrying amount of $38,100, for $40,400 cash. | |
| 4. | On December 31, 2020, Pearl entered into a capital lease for an office building. The present value of the annual rental payments is $391,600, which equals the fair value of the building. Pearl made the first rental payment of $60,500 when due on January 2, 2021. | |
| 5. | Net income for 2020 was $372,500. | |
| 6. | Pearl declared and paid the following cash dividends for 2020 and 2019. |
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Authors: Gunther Friedl, Andreas Biagosch
1st Edition
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