Question

Unbalanced Company Adjusted Trial Balance December 31, 2019 Credits Debits 84,000 102,000 81,600 12,000 240,000 10,800 144,000 480,000 120,000 168,000 36,000 8,400 Account Title Cash Investments Accounts receivable Allowance for Uncollectible Accounts Inventories Prepaid Insurance Land Buildings Equipment Accumulated depreciation - Buildings Accumulated depreciation - Equipment Patents (net of amortization) Accounts payable Interest payable Notes payable Bonds payable Discount on bonds payable Common stock Additional paid in capital in excess of par Retained earnings (before closing) Other accumulated comprehensive income (loss) Treasury stock, at cost Cash dividends Sales Cost of goods sold 84,000 24,000 156,000 336,000 48,000 120.000 240,000 144,000 14,400 18,000 4,800 120,000 84,000 $ 1,440,000 $ 1,440,000

Answer 1

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Unbalanced Company
Income Statement	Amount $
Sales	120,000.00
Less: Cost of goods sold	84,000.00
Net Income	36,000.00
Statement of Retained Earnings	Amount $
Opening Balance	144,000.00
Add: Net Income	36,000.00
Less: Dividends	4,800.00
Closing Balance	175,200.00
Balance Sheet
As at 31st December, 2019
Assets	Amount $	Amount $	Note
Current Assets
Cash and cash equivalents		66,000.00	See note A
Trade and other receivables	81,600.00
Allowance for uncollectible accounts	(12,000.00)	69,600.00	See note B
Prepaid insurance		10,800.00
Investments		66,000.00	See note C
Inventories		240,000.00
Land held for sale		30,000.00	See note D
Current Assets		482,400.00
Non Current Assets
Long Term Investments
Investments in other companies	36,000.00		See note C
Long Term Investments		36,000.00
Plant, Property & Equipment
Land		114,000.00	See note D
Building	480,000.00
Accumulated depreciation	(168,000.00)	312,000.00
Equipment	120,000.00
Accumulated depreciation	(36,000.00)	84,000.00
Plant, Property & Equipment		510,000.00
Intangible Assets
Patent (net)	8,400.00
Intangible Assets		8,400.00
Other Assets
Restricted cash balance	18,000.00		See note A
Other Assets		18,000.00
Total Assets		1,054,800.00
Liabilities
Current Liabilities
Trade and other Payables	84,000.00
Interest Payable	24,000.00
Current portion of Notes Payable	36,000.00		See note E
Current Liabilities		144,000.00
Non Current Liabilities
Non Current portion of Notes Payable		120,000.00	See note E
Bonds Payable	336,000.00		See note F
Discount on Bonds Payable	(48,000.00)	288,000.00
Non Current Liabilities		408,000.00
Total Liabilities		552,000.00
Stockholder's Equity
Common Stock (500,000 shares authorized, 100,000 shares issued, no par)	120,000.00
Additional paid in capital in excess of par	240,000.00
Retained Earnings	175,200.00
Other accumulated comprehensive income (loss)	(14,400.00)
Treasury stock at cost	(18,000.00)
Total Stockholder's Equity		502,800.00
Total Liabilities & Stockholder's Equity		1,054,800.00
Note/Workings
Note A	Amount $
Total Cash	84,000.00
Less: Cash $18,000 restricted to pay bonds payable that mature in 2035	18,000.00
Cash and cash equivalents to be disclosed as current assets	66,000.00
Please note that cash $23,000 restricted in a three-month Treasury bill will be shown as current assets only as it will realized within 3 months.
Note B	Amount $
Accounts receivable (net)	60,000.00
Add: Allowance for uncollectible accounts	8,000.00
Accounts receivable (gross)	68,000.00
Please note that In balance sheet Accounts receivable (gross) is shown and then Allowance for uncollectible accounts is deducted to arrive at Accounts receivable (net).
Note C	Amount $
Investment in equity securities	102,000.00
Out of above:
Investment in common stock of another corporation will be shown as long term investments as management intends to hold for at least three years	36,000.00
Remaining amount will be shown as current assets as balance of the investments is intended to be sold in the coming year.	66,000.00
Note D	Amount $
Land	144,000.00
Out of above:
$ 30,000 will be shown as current assets as the company has not used and is currently listed for sale.	30,000.00
Remaining amount will be shown as non current assets	114,000.00
Note E	Amount $		Note
Notes payable	156,000.00
Breakup
Note due in six months	24,000.00	Current portion of Notes Payable	G
Note due in six years	72,000.00	Non Current portion of Notes Payable	H
Balance
Note due in five annual installments of $ 10,000 each	60,000.00
So $ 12,000 is	12,000.00	Current portion of Notes Payable	I
Remaining $ 40,000 is	40,000.00	Non Current portion of Notes Payable	J
So total Current portion of Notes Payable	36,000.00		This is G+I
So total Non Current portion of Notes Payable	120,000.00		This is H+J
Note F
Bonds payable are maturing in 2024 so it is to be classified as Non Current Liabilities
Current Ratio	3.35
Current Assets/ Current Liabilities
Working Capital	338,400.00
Current Assets- Current Liabilities