Question

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Comprehensive Problem 3 Part 5: Note: You must complete parts 1, 2, 3, and 4 of this comprehensive problem before completing part 5 Based on the following information and the post-closing trial balance that follows, prepare a balance sheet in report form at December 31 of the current year: The merchandise inventory is stated at cost by the LIFO method. The product warranty payable is a current liability. Vacation pay payable: Current liability $7,140 Long-term liability 3,360 The unfunded pension liability is a long-term liability. Notes payable: Current liability $ 70,000 Long-term liability 630,000 Kornett Company Post-Closing Trial Balance December 31, 2015 Account Title Debit Balances Credit Balances Petty Cash 4,500 Cash 243,960 Notes Receivable 100,000 Accounts Receivable 470,000 Allowance for Doubtful Accounts 16,000 Inventory 320,000 Interest Receivable 1,875 Prepaid Insurance 45,640 Office Supplies 13,400 Land 654,925 Buildings 900,000 Accumulated Depreciation-Buildings 36,000 Office Equipment 246,000 Accumulated Depreciation-Office Equipment 44,000 Store Equipment 112,000 Accumulated Depreciation-Store Equipment 5,000 Mineral Rights 546,000 Accumulated Depletion 30,000

Answer 1

Kornett Company
Balance Sheet
December 31,20Y5
Assets
Current assets:
Petty cash		4,500
Cash		243,960
Notes receivable		100,000
Accounts receivable	470,000
Allowance for Doubtful accounts	-16,000
		454,000
Inventory		320,000
Interest receivable		1,875
Prepaid insurance		45,640
Office supplies		13,400
Total current assets			1,183,375
Property,plant, and equipment:
Land		654,925
Buildings	900,000
Accumulated depreciation-Buildings	-36,000
		864,000
Office equipment	246,000
Accumulated depreciation-Office equipment	-44,000
		202,000
Store equipment	112,000
Accumulated depreciation-Store equipment	-5,000
		107,000
Mineral Rights	546,000
Accumulated depletion	-30,000
		516,000
Total property,plant, and equipment			2,343,925
Intangible assets:
Patents			42,000
Total assets			3,569,300
Liabilities
Current liabilities:
Social Security Tax Payable		25,470
Medicare tax payable		4,710
Employees federal income tax payable		40,000
State unemployment tax payable		270
Federal unemployment tax payable		40
Salaries payable		157,000
Accounts payable		131,600
Interest payable		28,000
Product warranty payable		76,000
Vacation pension liability		7,140
Notes payable		70,000
Total current liabilities			540,230
Long-term liabilities:
Vacation pay payable		3,360
Unfunded pension liability		50,700
Notes payable		630,000
Total long-term liabilities			684,060
Stockholders' equity
Common stock		500,000
Retained earnings		1,845,010
Total stockholders' equity			2,345,010
Total liabilities and stockholders' equity			3,569,300