ACCOUNTING
P 3-6 Balance sheet preparation; disclosures
The following is a December 31, 2011, post-closing trial balance for the Vosburgh Electronics Corporation.
Account Title Debits Credits
Cash $ 68,000
Short-term investments 184,000
Accounts receivable 124,600
Long-term investments 35,800
Inventories 215,900
Loans to employees 40,700
Prepaid expenses (for 2012) 16,600
Land 299,000
Building 1,564,000
Machinery and equipment 652,000
Patent 115,000
Franchise 56,000
Note receivable 285,000
Interest receivable 12,300
Accumulated depreciation — building $ 607,000
Accumulated depreciation — equipment 201,000
Accounts payable 188,200
Dividends payable (payable on 1/16/12) 24,000
Interest payable 14,700
Taxes payable 39,200
Unearned revenue 43,000
Notes payable 273,000
Allowance for uncollectible accounts 6,500
Common stock 2,000,000
Retained earnings 272,300
Totals $ 3,668,900 $ 3,668,900
Additional information:
1. The common stock represents 1 million shares of no par stock authorized, 500,000 shares issued and outstanding.
2. The loans to employees are due on June 30, 2012.
3. The note receivable is due in installments of $50,000, payable on each September 30. Interest is payable annually.
4. Short-term investments consist of marketable equity securities that the company plans to sell in 2012 and $50,000 in treasury bills purchased on December 15 of the current year that mature on February 15, 2012. Long-term investments consist of marketable equity securities that the company does not plan to sell in the next year.
5. Unearned revenue represents customer payments for extended service contracts. Eighty percent of these contracts expire in 2012, the remainder in 2013.
6. Notes payable consists of two notes, one for $100,000 due on January 15, 2013, and another for $200,000 due on June 30, 2014.
Required:
1. Prepare a classified balance sheet for Vosburgh at December 31, 2011.
2. Identify the items that would require additional disclosure, either on the face of the balance sheet or in a disclosure note.
Click here for the SOLUTION
