BALACE SHEET PROBLEM: Woodrow Company has completed the accounting cycle for the
ID: 2464716 • Letter: B
Question
BALACE SHEET PROBLEM: Woodrow Company has completed the accounting cycle for the second year of its operations ended Dec. 31, Y24. Below find balances for all of its balance sheet accounts in an alphabetical order. All accounts have usual normal balances in USD.
Complete the classified balance sheet at the end of the reporting year and determine the following:
Accounts Payable
2,700
Accounts Receivable (Net of Allowance for Doubtful Accounts of $300)
6,700
Accumulated Depreciation - Equipment
9,000
Cash
500
Common Stock
500
Equipment at cost
18,000
Goodwill
2,000
Inventory
3,000
Land
8,000
LT Bonds Payable
14,000
Premium on LT Bonds Payable
500
Paid In Capital in Excess of Par
4,500
Retained Earnings
7,000
Taxes Payable
1,000
Treasury Stock
1,000
Q41. What is the dollar amount of the current assets?
A. $ 10,200 B. $ 10,500 C. 11,500 D. $12,500
Q42. What is the dollar amount of the total assets?
A. $ 27,200 B. $ 29,200 C. $30,200 D. $47,200
Q43. What is the dollar amount of the current liabilities?
A. $ 3,700 B. $ 4,200 C. $5,700 D. $6,200
Q44. What is the dollar amount of the total liabilities?
A. $ 17,700 B. $ 18,200 C. $20,200 D. $21,200
Q45. What is the dollar amount of the total stockholder’s equity?
A. $ 5,000 B. $ 11,000 C. $12,000 D. $13,000
Q46. A special repair to a machine will extend the life of the machine an additional four years beyond the original estimated life of 6 years. The $50,000 cost of this repair is:
A. a revenue expenditure. C. a capital expenditure.
B. an ordinary repair and maintenance expenditure D. either (A) or (B).
Q47. Which of the following assets are not depreciated?
A. Building C. Office Equipment
B. Land D. Delivery Vans
Q48. Issuance of bonds provides cash inflow from a financing activity.
A. True B. False
Q49. If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at
A. Discount B. Premium C. Par D. Debenture
Q50. Would you like to get a bonus point?
A. YES B. NO
Accounts Payable
2,700
Accounts Receivable (Net of Allowance for Doubtful Accounts of $300)
6,700
Accumulated Depreciation - Equipment
9,000
Cash
500
Common Stock
500
Equipment at cost
18,000
Goodwill
2,000
Inventory
3,000
Land
8,000
LT Bonds Payable
14,000
Premium on LT Bonds Payable
500
Paid In Capital in Excess of Par
4,500
Retained Earnings
7,000
Taxes Payable
1,000
Treasury Stock
1,000
Explanation / Answer
Ans : For Q41: 10,200$(A) (Accounts Receivables + Cash + Inventory)
Ans: For Q42: 29200$(B) (Accounts Receivables + Cash + Inventory+Equipment+Goodwill+Land)
Note: Equipments has been considered net of accumulted depriciations.
Ans : For Q43 3700$ (A) (Accounts Payable+ Taxes)
Ans: For Q44 18200 (B) (Accounts Payable+ Taxes + LT Bonds Payable + Premium on LT Bonds Payable)
Ans : For Q45 11000$ (B) (Common Stock + Paid In Capital in Excess of Par + Retained Earnings - Treasury Stocks)
Ans: For Q46 Any expenditure incurred on the assets which will have a long term effects on the asets as well ason the business and in addition to that if after incurring the expenditure the profit -earning capacity of the assets as well as that of the business then such expenses will be considered to be the capital expenditure. Looking to the question asked by asker, the repair made to the assets will be having the long term effect on the assets life of more than one year and such expenses will be giving extended benefits to the company by lowering the cost hence this expesnes of 50000$ will be considered to be the capital expenditure. So answer is option (C).
Ans: For Q47 Land (B). Land is not a depriciable asset.
Ans: For Q48 True (A). When the comapny issues the bonds it receives the cash as consideration for such of issue bonds. Also, issuing bonds is not the routine business of the comapany hence such cash inflow is not on account of trading activities but its rather a financing activities.
Ans: For Q49 Discount (A) Because, an existing bond's fixed interest payments are smaller than the interest payments now demanded by the market
Ans: For Q50 For a subjective rate, here comes a subjective answer, its Yes (A).
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