Question

The following balance sheet for the Hubbard Corporation was prepared by the company:

HUBBARD CORPORATION Balance Sheet At December 31, 2016
Assets
Buildings	$	760,000
Land		280,000
Cash		70,000
Accounts receivable (net)		140,000
Inventories		260,000
Machinery		290,000
Patent (net)		110,000
Investment in marketable equity securities		80,000
Total assets	$	1,990,000
Liabilities and Shareholders' Equity
Accounts payable	$	225,000
Accumulated depreciation		265,000
Notes payable		520,000
Appreciation of inventories		90,000
Common stock, authorized and issued     110,000 shares of no par stock		440,000
Retained earnings		450,000
Total liabilities and shareholders' equity	$	1,990,000

    

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 $60,000 but, due to a significant increase in market value, is listed at $140,000. The increase in the land account was credited to retained earnings.
2.	Marketable equity securities consist of stocks of other corporations and are recorded at cost, $30,000 of which will be sold in the coming year. The remainder will be held indefinitely.
3.	Notes payable are all long-term. However, a $200,000 note requires an installment payment of $50,000 due in the coming year.
4.	Inventories are recorded at current resale value. The original cost of the inventories is $170,000.

Required:

Prepare a corrected classified balance sheet for the Hubbard Corporation at December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

	HUBBARD CORPORATION
	Balance Sheet
	At December 31, 2016
	Assets
Current assets:
Cash		70000
Marketable securities		30000
Accounts receivable (net)		140000
Inventories		170000
Total current assets		410000
Investments:
Marketable securities	50000
Land held for sale	60000
Total investments		110000
Property, plant, and equipment:
Land	140000
Buildings	760000
Machinery	290000
	1190000
Less: Accumulated depreciation	-265000
Net property, plant, and equipment		925000
Intangible assets:
Patent		110000
Total assets		1555000
	Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable		225000
Current maturities of long-term debt		50000
Total current liabilities		275000
Long-term liabilities:
Notes payable		470000
Shareholders’ equity:
Common stock, no par value; 110,000 shares authorized; 110,000 shares issued and outstanding	440000
Retained earnings	370000
Total shareholders’ equity		810000
Total liabilities and shareholders’ equity		1555000