Question

The following balance sheet for the Hubbard Corporation was prepared by the company HUBBARD CORPORATION Balance Sheet At December 31, 2021 Assets Buildings Land $ 754,00 262,000 64,000 120,000 248, 284,000 104,000 65,000 $1,912,000 Accounts receivable (net) Inventory Machinery Patent (net) Investment in equity securities Total assets Liabilities and Shareholders' Equity Accounts payable Accumulated depreciation Notes payable Appreciation of Inventory Common stock (authorized and issued 104,000 shares of no par stock) Retained earnings Total liabilities and shareholders' equity 219.000 259,000 505,000 84,000 416,000 426.000 $1,912,000 Additional information: 1. The buildings, land, and machinery are all stated at cost except for a parcel of land that the company is holding for future sale. The land originally cost $54,000 but, due to a significant increase in market value is listed at $128.000. The increase in the land account was credited to retained earnings. 2. The investment in equity securities account consists of stocks of other corporations and are recorded at cost $24,000 of which will be sold in the coming year. The remainder will be held indefinitely 3. Notes payable are all long term. However, a $140,000 note requires an installment payment of $35,000 due in the coming year. 4. Inventory is recorded at current resale value. The original cost of the inventory is $164,000. Required: Prepare a corrected classified balance sheet for the Hubbard Corporation at December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Answer with working notes is given below

Hubbard Corporation Balance Sheet as on December 31, 2021 Assets Current Assets: Cash Marketable securities Accounts receivable (net) Inventories Total Current Assets $64,000 $24,000 $128,000 $164,000 $380,000 Investments: Marketable securities Land held for sale Total Investments $44,000 $54,000 $98,000 $134,000 $754,000 Fixed Assets: Land Buildings Machinery Less: Accumulated depreciation Total Fixed Assets $284,000 -$259,000 $25,000 $913,000 $104,000 $1,495,000 Intangible Assets: Patent (Net) Total Assets Liabilities and Stockholders' equity Current Liabilities: Accounts payable Current portion of long-term debt Total Current Liabilities $219,000 $35,000 $254,000 Long-term Liabilities: Notes Payable $473,000 $416,000 Stockholders' Equity: Common Stock (authorised and issued 104,000 shares of no par value) Retained Earnings Total Stockholders' Equity | Total Liabilities and Stockholders' equity $352,000 $768,000 $1,495,000 Working notes : Land-Current value in Balance sheet Less: Market value Balance Land - Fixed asset $262,000 $128,000 $134,000 Land of $54,000 will be shown as investments Retained earnings- Current value in Balance sheet Less: Land appreciation Retained earnings - Revised balance $426,000 $74,000 ($128,000-$54,000) $352,000 Investment in marketable securities Total marketable securities Less: Marketable securities to be sold in one year Balance - Investment in marketable securities $68,000 $24,000 Part of current assets $44,000 Part of Investments