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5-2 Koch Corporations adjusted trial balance contained the following asset accounts at December 31, 2014: Cash $8,090; Land $42,110; Patents $15,220; Accounts Receivable $92,150; Prepaid Insurance $6,180; Inventory $36,760; Allowance for Doubtful Accounts $4,700; Equity Investments (trading) $14,200.

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5-3 Included in Outkast Companys December 31, 2014, trial balance are the following accounts: Prepaid Rent $5,860; Debt Investments $71,280; Unearned Fees $24,220; Land (held for investment) $40,540; Notes Receivable (long-term) $54,720. Prepare the long-term investments section of the balance sheet. (Enter account name only and do not provide the descriptive information provided in the question.)

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5-4 Lowell Companys December 31, 2014, trial balance includes the following accounts: Inventory $129,380; Buildings $208,040; Accumulated Depreciation-Equipment $28,200; Equipment $197,820; Land (held for investment) $54,430; Accumulated Depreciation-Buildings $53,690; Land $66,780; Timberland $73,220. Prepare the property, plant, and equipment section of the balance sheet.

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5-5 Crane Corporation has the following accounts included in its December 31, 2014, trial balance: Equity Investments (trading) $27,810; Goodwill $159,890; Prepaid Insurance $15,700; Patents $224,630; Franchises $118,180. Prepare the intangible assets section of the balance sheet.

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5-7 Thomas Corporations adjusted trial balance contained the following liability accounts at December 31, 2014: Bonds Payable (due in 3 years) $100,650; Accounts Payable $81,060; Notes Payable (due in 90 days) $27,410; Salaries and Wages Payable $5,250; Income Taxes Payable $7,630. Prepare the current liabilities section of the balance sheet.

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5-10 Hawthorn Corporations adjusted trial balance contained the following accounts at December 31, 2014: Retained Earnings $126,100; Common Stock $750,740; Bonds Payable $100,050; Paid-in Capital in Excess of Par-Common Stock $204,020; Goodwill $56,790; Accumulated Other Comprehensive Loss $157,610; Noncontrolling Interest $33,800.

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Prepare the stockholders equity section of the balance sheet

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Exercise 5-2 Balance sheet Classification

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Exercise 5-7 Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2014. Inventory (finished goods)$ 59,660Cost of Goods Sold$2,172,000Unearned Service Revenue92,430Notes Receivable56,000Equipment256,200Accounts Receivable163,400Inventory (work in process)42,200Inventory (raw materials)209,410Cash46,500Supplies Expense72,447Equity Investments (short-term)38,970Allowance for Doubtful Accounts12,470Customer Advances41,400Licenses18,520Restricted Cash for Plant Expansion57,470Additional Paid-in Capital95,390Treasury Stock28,150 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 $52,410. 3.The short-term investments have a fair value of $30,450. (Assume they are trading securities.) 4.The notes receivable are due April 30, 2016, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrued interest due on December 31, 2014.) 5.The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $54,000 are pledged as collateral on a bank loan. 6.Licenses are recorded net of accumulated amortization of $14,650. 7.Treasury stock is recorded at cost.

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Exercise 5-10 For each of the following transactions occurred during the year, indicate the dollar amount to be reported as a:-

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On December 20, 2014, a former employee filed a legal action against Baylor for $106,900 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote. Bonuses to key employees based on net income for 2014 are estimated to be $171,800.

On December 1, 2014, the company borrowed $891,600 at 8% per year. Interest is paid quarterly.

Credit sales for the year amounted to $10,406,700. Baylors expense provision for doubtful accounts is estimated to be 3% of credit sales.

On December 15, 2014, the company declared a $2.60 per share dividend on the 41,800 shares of common stock outstanding, to be paid on January 5, 2015.

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Exercise 5-12
Presented below is the trial balance of Scott Butler Corporation at December 31, 2014. Debit Cash Sales Debt Investments (trading) (cost, $145,000) Cost of Goods Sold Debt Investments (long-term) Equity Investments (long-term) Notes Payable (short-term) Accounts Payable Selling Expenses Investment Revenue Land Buildings Dividends Payable Accrued Liabilities Accounts Receivable Accumulated Depreciation-Buildings Allowance for Doubtful Accounts Administrative Expenses Interest Expense Inventory Gain (extraordinary) Notes Payable (long-term) Equipment Bonds Payable Accumulated Depreciation-Equipment Franchises Common Stock ($5 par) Treasury Stock Patents Retained Earnings Paid-in Capital in Excess of Par Totals $12,360,350 1,95,250 1,95,000 1,60,000 6,04,250 9,01,450 2,12,450 6,00,390 4,39,250 2,60,000 10,43,390 20,04,250 1,57,250 48,04,250 3,02,390 2,80,390 $ 200,390

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Credit $ 8,104,250

94,250 4,59,250 64,450

1,39,390 1,00,250 1,52,000 29,250

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81,450 9,03,390 10,03,390 60,000 10,04,250

81,390 83,390 $12,360,350

Prepare a balance sheet at December 31, 2014, for Scott Butler Corporation. (Ignore income taxes). (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)

Exercise 5-14

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The comparative balance sheets of Constantine Cavamanlis Inc. at the beginning and the end of the year 2014 are as follows. CONSTANTINE CAVAMANLIS INC. BALANCE SHEETS Dec. 31, 2014 Assets Cash Accounts receivable Equipment Less: Accumulated Depreciation-Equipment Total Liabilities and Stockholders Equity Accounts payable Common stock Retained earnings Total $ 46,500 95,070 43,070 19,570 $165,070 $ 15,570 90,570 24,570 13,570 $117,140 $30,930 4,500 18,500 6,000 Inc. Inc. Inc. Inc. Jan. 1, 2014 Inc./Dec.

$ 24,070 1,01,500 39,500 $165,070

$ 17,570 82,570 17,000 $117,140

6,500 18,930 22,500

Inc. Inc. Inc.

Net income of $48,070 was reported, and dividends of $25,570 were paid in 2014. New equipment was purchased and none was sold. Prepare a statement of cash flows for the year 2014.

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Exercise 5-17

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Grant Wood Corporations balance sheet at the end of 2013 included the following items. Current assets Land Buildings Equipment Accum. depr.buildings Accum. depr.equipment Patents Total

$236,741 32,529 1,21,741 92,529

Current liabilities Bonds payable Common stock Retained earnings

$151,741 1,01,741 1,82,529 46,529

(31,741

Total

$482,540

(11,000 41,741 $482,540

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The following information is available for 2014. 1 2 3 4 5 6 7 8 9 10 Net income was $55,681.

Equipment (cost $21,741 and accumulated depreciation $9,741) was sold for $10,000. Depreciation expense was $5,741 on the building and $10,741 on equipment. Patent amortization was $2,500. Current assets other than cash increased by $29,000. Current liabilities increased by $14,741. An addition to the building was completed at a cost of $28,741. A long-term investment in stock was purchased for $16,000. Bonds payable of $52,529 were issued. Cash dividends of $30,000 were declared and paid. Treasury stock was purchased at a cost of $11,000.

Problem 5-4
Presented below is the balance sheet of Kishwaukee Corporation as of December 31, 2014. KISHWAUKEE CORPORATION BALANCE SHEET DECEMBER 31, 2014 Assets Goodwill (Note 2) Buildings (Note 1) Inventory Land Accounts receivable Treasury stock (50,000 shares) Cash on hand Assets allocated to trustee for plant expansion Cash in bank Debt investments (held-to-maturity)

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$ 124,810 16,40,000 3,16,910 9,50,000 1,74,810 91,810 1,80,710 74,810 1,42,810 $3,696,670 Equities

Notes payable (Note 3) Common stock, authorized and issued, 1,000,000 shares, no par Retained earnings Noncontrolling interest Appreciation capital (Note 1) Income tax payable Reserve for depreciation recorded to date on the building

$ 604,810

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11,54,810 8,07,810 59,810 5,74,810 79,810 4,14,810 $3,696,670

Note 1: Buildings are stated at cost, except for one building that was recorded at appraised value. The excess of appraisal value over cost was $574,810. Depreciation has been recorded based on cost. Note 2: Goodwill in the amount of $124,810 was recognized because the company believed that book value was not an accurate representation of the fair value of the company. The gain of $124,810 was credited to Retained Earnings. Note 3: Notes payable are long-term except for the current installment due of $100,000. Prepare a corrected classified balance sheet in good form. The notes above are for information only. (List Current Assets in order of liquidity.)

Problem 5-5
Presented below is the balance sheet of Sargent Corporation for the current year, 2014. SARGENT CORPORATION BALANCE SHEET DECEMBER 31, 2014 Current assets Investmen ts Property, plant, and equipment Intangible assets $ 486,890 6,41,890 17,21,890 3,05,000 $3,155,670 The following information is presented. 1 Current liabilities Long-term liabilities Stockholders equity

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$ 381,890 10,01,890 17,71,890 $3,155,670

3 4 5 6 7

The current assets section includes cash $151,890, accounts receivable $171,890 less $11,890 for allowance for doubtful accounts, inventories $181,890, and unearned rent revenue $6,890. Inventory is stated on the lower-of-FIFO-cost-ormarket. The investments section includes the cash surrender value of a life insurance contract $41,890; investments in common stock, short-term (trading) $81,890 and long-term (available-for-sale) $271,890; and bond sinking fund $246,220. The cost and fair value of investments in common stock are the same. Property, plant, and equipment includes buildings $1,041,890 less accumulated depreciation $361,890; equipment $451,890 less accumulated depreciation $181,890; land $501,890; and land held for future use $270,000. Intangible assets include a franchise $166,890; goodwill $101,890; and discount on bonds payable $36,220. Current liabilities include accounts payable $141,890; notes payable-short-term $81,890 and long-term $121,890; and income taxes payable $36,220. Long-term liabilities are composed solely of 7% bonds payable due 2022. Stockholders equity has preferred stock, no par value, authorized 200,000 shares, issued 71,890 shares for $431,340; and common stock, $1.00 par value, authorized 400,000 shares, issued 101,890 shares at an average price of $10. In addition, the corporation has retained earnings of $321,650.

Prepare a balance sheet in good form, adjusting the amounts in each balance sheet classification as affected by the information given above. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)

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Problem 5-6

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Problem 5-6

Lansbury Inc. had the following balance sheet at December 31, 2013. LANSBURY INC. BALANCE SHEET DECEMBER 31, 2013 Cash Accounts receivable Investments Plant assets (net) Land $24,710 21,530 36,710 81,000 44,710 $208,660 During 2014, the following occurred. 1 2 3 4 5 6 7 8 Lansbury Inc. sold part of its investment portfolio for $15,330. This transaction resulted in a gain of $3,730 for the firm. The company classifies its investments as available-for-sale. A tract of land was purchased for $22,710 cash. Long-term notes payable in the amount of $16,330 were retired before maturity by paying $16,330 cash. An additional $20,330 in common stock was issued at par. Dividends of $8,530 were declared and paid to stockholders. Net income for 2014 was $36,710 after allowing for depreciation of $11,330. Land was purchased through the issuance of $34,710 in bonds. At December 31, 2014, Cash was $32,330, Accounts Receivable was $46,310, and Accounts Payable remained at $34,710. Accounts payable Notes payable (long-term) Common stock Retained earnings $34,710 45,710 1,04,710 23,530 $208,66 0

Prepare a statement of cash flows for 2014. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

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