Uhura Company has decided to expand its operations. The bookkeeper recently comp
ID: 2421713 • Letter: U
Question
Uhura Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion
UHURA COMPANY
BALANCE SHEET
FOR THE YEAR ENDED 2014
Current assets Cash$234,840 Accounts receivable (net)344,840 Inventory (lower-of-average-cost-or-market)405,840 Equity investments (trading)-at cost (fair value $122,430)142,430Property, plant, and equipment Buildings (net)572,430 Equipment (net)162,430 Land held for future use177,430Intangible assets Goodwill84,840 Cash surrender value of life insurance94,840 Prepaid expenses16,840Current liabilities Accounts payable137,430 Notes payable (due next year)129,840 Pension obligation84,430 Rent payable53,840 Premium on bonds payable57,840Long-term liabilities Bonds payable502,430Stockholders’ equity Common stock, $1.00 par, authorized 400,000 shares, issued 294,840294,840 Additional paid-in capital164,840 Retained earnings?
Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $164,840 and for the equipment, $109,840. The allowance for doubtful accounts has a balance of $21,840. The pension obligation is considered a long-term liability. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Buildings and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)
Explanation / Answer
Uhura Company
Balance Sheet
December 31, 2014
Assets
Current assets
Cash............................................................................
$234,840
Trading securities—at fair value..............................
122,430
Accounts receivable...................................................
$366,680
Less: Allowance for doubtful
accounts.............................................................
21,840
344,840
Inventories, at lower of average
cost or market..........................................................
405,840
Prepaid expenses........................................................
16,840
Total current assets..............................................
$1,124,790
Long-term investments
Land held for future use...........................................
177,430
Cash surrender value of life
insurance..................................................................
94,840
272,270
Property, plant, and equipment
Building.......................................................................
$737,270
Less: Accum. depr.—building............................
164,840
572,430
Office equipment........................................................
272,270
Less: Accum. depr.—office
equipment..........................................................
109,840
162,430
734,860
Intangible assets
Goodwill......................................................................
84,840
Total assets...........................................................
$2,216,760
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable......................................................
$ 137,430
Notes payable (due next year)..................................
129,840
Rent payable..............................................................
53,840
Total current liabilities........................................
$321,110
Long-term liabilities
Bonds payable...........................................................
$502,430
Add: Premium on bonds payable............................
57,840
$560,270
Pension obligation.....................................................
84,430
644,700
Total liabilities.....................................................
965,810
Stockholders’ equity
Common stock, $1 par, authorized
400,000 shares, issued 290,000
shares......................................................................
294,840
Additional paid-in capital.........................................
164,840
459,680
Retained earnings.....................................................
791,270*
Total stockholders’ equity..................................
1,250,950
Total liabilities and stock-
holders’ equity..................................................
$2,216,760
*$2,216,760 – $965,810 – $459,680
Uhura Company
Balance Sheet
December 31, 2014
Assets
Current assets
Cash............................................................................
$234,840
Trading securities—at fair value..............................
122,430
Accounts receivable...................................................
$366,680
Less: Allowance for doubtful
accounts.............................................................
21,840
344,840
Inventories, at lower of average
cost or market..........................................................
405,840
Prepaid expenses........................................................
16,840
Total current assets..............................................
$1,124,790
Long-term investments
Land held for future use...........................................
177,430
Cash surrender value of life
insurance..................................................................
94,840
272,270
Property, plant, and equipment
Building.......................................................................
$737,270
Less: Accum. depr.—building............................
164,840
572,430
Office equipment........................................................
272,270
Less: Accum. depr.—office
equipment..........................................................
109,840
162,430
734,860
Intangible assets
Goodwill......................................................................
84,840
Total assets...........................................................
$2,216,760
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable......................................................
$ 137,430
Notes payable (due next year)..................................
129,840
Rent payable..............................................................
53,840
Total current liabilities........................................
$321,110
Long-term liabilities
Bonds payable...........................................................
$502,430
Add: Premium on bonds payable............................
57,840
$560,270
Pension obligation.....................................................
84,430
644,700
Total liabilities.....................................................
965,810
Stockholders’ equity
Common stock, $1 par, authorized
400,000 shares, issued 290,000
shares......................................................................
294,840
Additional paid-in capital.........................................
164,840
459,680
Retained earnings.....................................................
791,270*
Total stockholders’ equity..................................
1,250,950
Total liabilities and stock-
holders’ equity..................................................
$2,216,760
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