E5-7 (Current Assets Section of the Balance Sheet) Presented below are selected
ID: 2421588 • Letter: E
Question
E5-7 (Current Assets Section of the Balance Sheet) Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2014.
Inventory ( nished goods) $ 52,000
Unearned Service Revenue 90,000
Equipment 253,000
Inventory (work in process) 34,000
Cash 37,000
Equity Investments (short-term) 31,000
Customer Advances 36,000
Restricted Cash for Plant Expansion 50,000
Cost of Goods Sold $2,100,000
Notes Receivable 40,000
Accounts Receivable 161,000
Inventory (raw materials) 207,000
Supplies Expense 60,000
Allowance for Doubtful Accounts 12,000
Licenses18,000
Additional Paid-in Capital 88,000
Treasury Stock 22,000
The following additional information is available.
Inventories are valued at lower-of-cost-or-market using LIFO.
Equipmentisrecordedatcost.Accumulateddepreciation,computedonastraight-linebasis,is$50,600.
The short-terminvestments have a fairvalue of $29,000.(Assumetheyaretradingsecurities.)
The notes receivable are due April30,2016,with interest receivable every April30.The notes bear
interest at 6%. (Hint: Accrued interest due on December 31, 2014.)
The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of
$50,000 are pledged as collateral on a bank loan.
Licenses are recorded net of accumulated amortization of $14,000.
Treasury stock is recorded at cost.
Instructions
Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2014, balance sheet, with appropriate disclosures.
Explanation / Answer
Solution:
Current Assets Cash 37,000 Accounts Receivables 161,000 Less: Allowance for doubtful debts -12,000 149,000 Short term investments 29,000 Notes Receivable 40,000 Inventory Raw material 207,000 Work in progress 34,000 Finished Goods 52,000 293,000 Total Current Assets 548,000Related Questions
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