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The following is a list (in random order) of KIP International Products Company's December 31, 2016...

The following is a list (in random order) of KIP International Products Company's December 31, 2016 balance sheet accounts of the International Products Company:

Additional Paid-In Capital on Preferred Stock $ 1,680 Accounts Payable $ 10,200
Accounts Receivable 14,200 Prepaid Insurance 840
Dividends Payable 1,770 Discount on Bonds Payable 1,900
Buildings 68,100 Common Stock, $10 par 13,000
Bonds Payable (due 2019) 23,500 Equipment 30,500
Retained Earnings 97,900 Allowance for Doubtful Accounts 730
Office Supplies 1,950 Preferred Stock, $50 par 10,500
Current Income Taxes Payable 2,750 Accumulated Depreciation: Buildings 9,000
Accumulated Depreciation: Equipment 9,000 Current Interest Payable 2,420
Patents (net) 3,400 Investment in Held-to-Maturity Bonds 9,000
Notes Payable (due January 1, 2019) 10,300 Cash 9,200
Inventory 40,100 Treasury Stock (at cost) 1,300
Additional Paid-In Capital on Common Stock 7,300 Accrued Wages 2,040
Sinking Fund for Bond Retirement 7,600 Land 14,000

Required:

1. Prepare a properly classified balance sheet according to U.S. GAAP for KIP as of December 31, 2016.

Kip International Products Company
Balance Sheet
December 31, 2016
Assets
Current Assets:
$
$
Prepaid items:
$
Total current assets $
Long-Term Investments:
$
Total long-term investments
Property, Plant, and Equipment:
$
$
$
Total property, plant, and equipment
Intangible Assets:
Total Assets $
Liabilities
Current Liabilities:
$
Total current liabilities $
Long-Term Liabilities:
$
$
Total long-term liabilities
Total Liabilities $
Shareholders' Equity
Contributed Capital:
$
Total contributed capital $
Total contributed capital and retained earnings $
Total shareholders' equity
Total liabilities and shareholders' equity $

2. Assume instead that KIP uses IFRS. Prepare its balance sheet as of December 31, 2016.

KIP INTERNATIONAL PRODUCTS COMPANY
Balance Sheet
December 31, 2016
Assets
Noncurrent Assets
$
$
$
Total noncurrent assets $
Current Assets
$
$
Prepaid items
$
Total current assets
Total Assets $
Shareholders' Equity
Contributed Capital
$
Total contributed capital $
Retained earnings
Total contributed capital and Retained earnings $
Total Shareholders' Equity
Liabilities
Noncurrent Liabilities
$
$
Total noncurrent liabilities
Current Liabilities
$
Total current liabilities $
Total Liabilities $
Total Shareholders' Equity and Liabilities $

Solutions

Expert Solution

1. Prepare a properly classified balance sheet according to U.S. GAAP for KIP as of December 31, 2016.

Answer:

KIP INTERNATIONAL PRODUCTS COMPANY
Balance Sheet
December 31, 2016
Assets
Current Assets:
Cash 9,200
Accounts receivable        14,200
Less: Allowance for doubtful accounts           (730) 13,470
Inventory 40,100
Prepaid items:
Insurance              840
Office supplies          1,950 2,790
Total current assets 65,560
Long-Term Investments:
Investment in held-to-maturity bonds 9,000
Sinking fund for bond retirement 7,600
Total long-term investments 16,600
Property, Plant, and Equipment:
Land 14,000
Buildings 68,100
Less: Accumulated depreciation (9,000) 59,100
Equipment 30,500
Less: Accumulated depreciation (9,000) 21,500
Total property, plant, and equipment 94,600
Intangible Assets:
Patents (net) 3,400
Total Assets 180,160
Liabilities
Current Liabilities:
Accounts payable 10,200
Current interest payable 2,420
Dividends payable 1,770
Accrued wages 2,040
Current income taxes payable 2,750
Total current liabilities 19,180
Long-Term Liabilities:
Bonds payable (due 2019) 23,500
Less: Discount on bonds payable (1,900)
Notes payable (due 1/1/2019). 21,600
Total long-term liabilities 10,300 31,900
Total Liabilities 51,080
Shareholders’ Equity
Contributed Capital:
Preferred stock $50 par 10,500
Common stock, $10 par 13,000
Additional paid-in capital on preferred stock 1,680
Additional paid-in capital on common stock 7,300
Total contributed capital 32,480
Retained earnings 97,900
Total contributed capital and retained earnings 130,380
Less: Treasury stock (at cost) (1,300)
Total Shareholders’ Equity 129,080
Total Liabilities and Shareholders’ Equity 180,160

Explanation:

For preparing the balance sheet as per U.S. GAAP, we need to first include the Current Assets, and the the non current assets of the firm. Then add both to calculate the total assets. Then we need to include the Current Liabilities and then the Non current liabilities to get the total liabilties and then include the shareholders equity. This is the format for balance sheet as per US GAAP.

2. Assume instead that KIP uses IFRS. Prepare its balance sheet as of December 31, 2016.

Answer:

KIP INTERNATIONAL PRODUCTS COMPANY
Balance Sheet
December 31, 2016
Assets
Noncurrent Assets:
Investment in held-to-maturity bonds 9,000
Sinking fund for bond retirement 7,600
Land 14,000
Buildings 68,100
Less: Accumulated depreciation (9,000) 59,100
Equipment 30,500
Less: Accumulated depreciation (9,000) 21,500
Patents (net) 3,400
Total noncurrent assets 114,600
Current Assets:
Cash 9,200
Accounts receivable 14,200
Less: Allowance for doubtful accounts (730) 13,470
Inventory 40,100
Prepaid items:
Insurance 840
Office supplies 1,950 2,790
Total current assets 65,560
Total Assets 180,160
Shareholders’ Equity
Contributed Capital:
Preferred stock $50 par 10,500
Common stock, $10 par 13,000
Additional paid-in capital on preferred stock 1,680
Additional paid-in capital on common stock 7,300
Total contributed capital 32,480
Retained earnings 97,900
Total contributed capital and retained earnings 130,380
Less: Treasury stock (at cost) . (1,300)
Total Shareholders’ Equity . 129,080
Liabilities
Noncurrent Liabilities:
Bonds payable (due 2019). 23,500
Less: Discount on bonds payable
ekkarill92 answered 2 years ago
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