Question

The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Account Title Debits Credits Cash 85,000 Short-term investments 200,000 Accounts receivable 141,000 Long-term investments 44,000 Inventory 224,000 Receivables from employees 49,000 Prepaid expenses (for 2022) 25,000 Land 289,000 Building 1,640,000 Equipment 646,000 Patent (net) 161,000 Franchise (net) 49,000 Notes receivable 295,000 Interest receivable 21,000 Accumulated depreciation—building 629,000 Accumulated depreciation—equipment 219,000 Accounts payable 198,000 Dividends payable (payable on 1/16/2022) 19,000 Interest payable 25,000 Income Taxes payable 49,000 Deferred revenue 69,000 Notes payable 318,000 Allowance for uncollectible accounts 17,000 Common stock 2,036,000 Retained earnings 290,000 Totals 3,869,000 3,869,000 Additional information: The common stock represents 1.3 million shares of no par stock authorized, 590,000 shares issued and outstanding. The receivables from employees are due on June 30, 2022. The notes receivable are due in installments of $59,000, payable on each September 30. Interest is payable annually. Short-term investments consist of securities that the company plans to sell in 2022 and $59,000 in treasury bills purchased on December 15 of the current year that mature on February 15, 2022. Long-term investments consist of securities that the company does not plan to sell in the next year. Deferred revenue represents payments from customer for extended service contracts. Seventy five percent of these contracts expire in 2022, the remainder in 2023. Notes payable consists of two notes, one for $109,000 due on January 15, 2023, and another for $209,000 due on June 30, 2024. Required: Prepare a classified balance sheet for Vosburgh at December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Vosburgh Electronics Corporation Balance Sheet December 31, 2021 ASSETS Current Assets: Cash and cash equivalents $144,000 (Cash - 85,000 + Treasury bills - 59,000) Short term investments $141,000 ($200,000 - 59,000) Accounts Receivable $141,000 Less: Allowance for uncollectible accounts $17,000 $124,000 Inventory $224,000 Receivables from employees $49,000 Prepaid expenses $25,000 Notes Receivable - current portion $59,000 Interest Receivable $21,000 Total Current assets $787,000 Investments: Notes Receivable $236,000 (295,000 - 59,000) Long-term investments $44,000 Total investments $280,000 Property, Plant and Equipment Land $289,000 Building $1,640,000 Less: Accumulated Depreciation - Building $629,000 $1,011,000 Equipment $646,000 Less: Accumulated Depreciation - Equipment $219,000 $427,000 Total Property, Plant and Equipment $1,727,000 Intangible Assets Patent (net) $161,000 Franchise (net) $49,000 Total Intangible Assets $210,000 Total Assets $3,004,000

$198,000 $19,000 $25,000 $49,000 $51,750 (69,000 * 75%) $342,750 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable Dividends Payable Interest payable Income Taxes Payable Deferred Revenue Total Current Liabilities Long term liabilities: Notes Payable Deferred Revenue Total Long term liabilities Total Liabilities Stockholder's Equity Common Stock, 590,000 shares issued and outstanding Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $318,000 $17,250 (69,000 * 25%) $335,250 $678,000 $2,036,000 $290,000 $2,326,000 $3,004,000