Question

Apple, Inc., a privately held corporation, is negotiating a loan for expansion purposes and the bank requires audited financial statements. Before closing the accounting records for the year ended December 31, 2019, Apple's controller prepared the following comparative financial statements for 2019 and 2018: Apple, Inc. Balance Sheets December 31, 2016 and 2015 2016 2015 $ 550,000 $300,000 Cash Investment securities (reported at market cost, $142,000) Accounts receivable Allowance for doubtful accounts 156,000 974,000 (100,000) 850,000 620,000 (300.000) $2.750,000 784,000 (64,000) 770,000 434,000 (242.000) $1,982,000 Inventories Property and equipment Accumulated depreciation Total assets $ 154,000 40,000 600,000 0 Accounts payable Accrued expenses Note payable, 5-year Estimated contingent liability Common stock, $10 par Additional paid-in capital 180,000 160,000 600,000 200,000 420,000 260,000 420,000 260,000

In the beginning when it asks for 2019 it means 2016 and when it says 2018 it means 2015.

Answer 1

Solution:

Requirement 1 : Balance Sheet as on Dec 31, 2016

Apple Inc Balance Sheet As of Dec 31,2016 Amounts Assets Current Assets: Cash Investment Securities Accounts Receivable Inventories Total Current Assets Property and equipment: Property and equipment: Less Accumulated Depreciation Property and equipment net Total Assets $550,000.00 $142,000.00 $830,000.00 $820,000.00 $2,342,000.00 $700,000.00 ($316,000.00) $384,000.00 $2,726,000.00 Liabilities and Equity Current Liabilities Note Payable 5 year Accounts Payable Accrued Expenses Total Current Liabilities $600,000.00 $180,000.00 $160,000.00 $940,000.00 $200,000.00 Commitments and Contingencies Equity Common Stock Addition Paid in Stock Retained Earnings Total Equity Total Liabilities and Equity $420,000.00 $260,000.00 $906,000.00 $1,586,000.00 $2,726,000.00 Scanne Camscan

Requirement 2:

Events and other information that should be disclosed as notes to Financial Statements

1) Valuation of Investment should be disclosed to notes to accounts. Investments should be valued at lower of Cost or Market price.

2) Valuation of Inventories to be disclosed

3) Status of Contingent liabilities, Amount of Contingent liability recognised as expenses

4) Disclosure for refinance programme of Company