Question

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Presented below are selected accounts of Tamarisk Company at December 31, 2020.

Inventory (finished goods)		$ 56,300		Cost of Goods Sold		$2,134,500
Unearned Service Revenue		99,900		Notes Receivable		41,000
Equipment		258,800		Accounts Receivable		171,010
Inventory (work in process)		39,400		Inventory (raw materials)		186,240
Cash		46,300		Supplies Expense		59,680
Debt Investments (trading)		38,100		Allowance for Doubtful Accounts		13,110
Customer Advances		37,900		Licenses		19,680
Restricted Cash for Plant Expansion		59,200		Additional Paid-in Capital		87,790
				Treasury Stock		22,670

The following additional information is available.

1.		Inventories are valued at lower-of-cost-or-market using LIFO.
2.		Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $54,682.
3.		The short-term investments have a fair value of $31,290.
4.		The notes receivable are due April 30, 2022, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2020.)
5.		The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $53,900 are pledged as collateral on a bank loan.
6.		Licenses are recorded net of accumulated amortization of $13,390.
7.		Treasury stock is recorded at cost.

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Answer 1

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Answer 2

Please refer the following image for the solution:  

Tamarisk Company Balance Sheet (Partial) As at December 31, 2020 Assets Current Assets Cash ($46,300 + $59,200) $ 105,500 Less: restricted cash for plant expansion $ 59,200 $ 46,300 Trading securities at fair value (cost, $38,100) $ 31,290 Accounts Receivable ($53,900 is pledged as collateral on bank loan) $ 171,010 Less: Allowance for doubtful accounts $ 13,110 $ 157,900 Interest Receivable ($41,000 * 6% * 8/12) $ 1,640 Inventories at lower-of-cost-(determined using LIFO)-or-market: Finished Goods $ 56,300 Work in Process $ 39,400 Raw Materials $ 186,240 $281,940 Total Current Assets $ 519,070