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 Cash 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 109,000 shares of no par stock) Retained earnings Total liabilities and shareholders' equity $ 759,000 277,000 69,000 138,000 258,000 289,000 109,000 78,000 $1,977,000 $ 224,000 264,000 518,000 89,000 436,000 446,000 $1,977,000 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 $59,000 but, due to a significant increase in market value, is listed at $138,000. 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, $29,000 of which will be sold in the coming year. The remainder will be held indefinitely 3. Notes payable are all long term. However, a $190,000 note requires an installment payment of $47,500 due in the coming year. 4. Inventory is recorded at current resale value. The original cost of the inventory is $169,000. 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

HUBBARD CORPORATION Balance Sheet At December 31, 2021 Assets assets: Current Cash $ 69,000 $29,000 $138,000 $ 169,000 $ 405,000 Marketable securities Accounts receivable (net) Inventories To tal current assets Investments: Marketable securities Land held for sale Total investments Property, plant and equipment: Land Buildings Machinery $49,000 $ 59,000 $lod, voo $ 139,000 $ 759,000 $289,000 $1,187,000 $264,000 $923,000 Less: Accumulated depreciation Net propesty, plant and equipment Intangible assets: Patent Total assets $ 109,000 $1,545,000

$224,ooo $ 47,500 $271,500 Liabilities and shareholders' Equity Current liabilities? Accounts Payable Current maturities of long team debt Total current liabilities Long-term liabilities: Notes Payable Share holders' equity: Common stock, no par value, 109,000 shares authorized, 109,000 shares issued and $436, ooo Outstanding Retained earnings $ 367,000 Total shareholders' equity Total liabilities and shareholders' equity $470,500 $ 803,000 $1,545,000 Calculation: Investments & Marketable Securities = $70,000 - $29,000 2 $49,000 Land = ($277,000 - $59,000 in land held for sale - ($130,000 - $59,000) increase in land] = $277,000 - $59,000 - $79,000 increase in Land = $139,000 Notes payable = $518,000 - $47,500 & $470, 500 Retained earnings = $ 446,000 - $ 79,000 increase in land - $ 367,000