Problem 5-5 Presented below is the balance sheet of Sargent Corporation for the

Question

Problem 5-5 Presented below is the balance sheet of Sargent Corporation for the current year, 2017 PEARL CORPORATION BALANCE SHEET DECEMBER 31, 2017 Current assets $ 488,860 Current liabilities 383,860 1,003,860 1,773,860 $3,161,580 643,860 Long-term liabilities Property, plant, and equipment 1,723,860 Stockholders' equity Intangible assets 305,000 $3,161,580 The following information is presented 1. The current assets section includes cash $153,860, accounts receivable $173,860 less $13,860 for allowance for doubtful accounts, inventories $183,860, and unearned rent revenue $8,860. Inventory is stated on the lower-of-FIFO-cost-or-market. The investments section includes the cash surrender value of a life insurance contract $43,860; investments in common stock, short-term $83,860 and long-term $273,860; and bond sinking fund $242,280 The cost and fair value of investments in common stock are the same 3. Property, plant, and equipment includes buildings $1,043,860 less accumulated depreciation $363,860, equipment $453,860 less accumulated depreciation $183,860, land $503,860, and land held for future use $270,000 4. Intangible assets include a franchise $168,860, goodwill $103,860, and discount on bonds payable $32,280 s. Current liabilities include accounts payable $143,860, notes payable- short-term $83,860 and long-term $123,860, and income taxes payable $32,280 Long-term liabilities are composed solely of 7% bonds payable due 2025 6. '. Stockholders' equity has preferred stock, no par value, authorized 200,000 shares, issued 73,860 shares for $443,160, and common stock, $1.00 par value, authorized 400,000 shares issued 103,860 shares at an average price of $10. In addition, the corporation has retained earnings of $292,100

Explanation / Answer

PEARL CORPORATION Balance Sheet ASSETS CURRENT ASSETS Cash $153,860 Equity Investments (Trading) $83,860 Accounts Receivable $173,860 Less : Allowance for doubtful accounts $13,860 $160,000 Inventories (Lower of FIFO cost or market) $183,860 Total Current Assets $581,580 INVESTMENTS Equity Investments (at fair value - Available for Sale) $273,860 Bond Sinking Fund $242,280 Cash Surrender Value of Life Insurance $43,860 Land held for Future Use $270,000 $830,000 PROPERTY, PLANT AND EQUIPMENT Land $503,860 Buildings $1,043,860 Less : Accumulated Depreciation $363,860 $680,000 Equipment $453,860 Less : Accumulated Depreciation $183,860 $270,000 $1,453,860 INTANGIBLE ASSETS Franchise $168,860 Goodwill $103,860 $272,720 Total Assets $3,138,160 LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Accounts Payable $143,860 Notes Payable $83,860 Income Taxes Payable $32,280 Unearned Rent Revenue $8,860 Total Current Liabilities $268,860 LONG TERM LIABILITIES Notes Payable $123,860 7% Bonds payable, due 2022 $1,003,860 Less : Discount on Bonds Payable $32,280 $971,580 $1,095,440 Total Liabilities $1,364,300 STOCKHOLDERS EQUITY Capital Stock Preferred Stock, no par value     200000 shares authorised 73860 issued and outstanding $443,160 Common Stock, $1 par value              400000     shares authorised                103860   issued and outstanding $103,860 Paid in capital in excess of Par common Stock 103860*0 $934,740 Retained Earnings $292,100 Total Stockholders Equity $1,773,860 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $3,138,160

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.