The following balance sheet for the Hubbard Corporation was prepared by the company: HUBBARD CORPORATION Balance...

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

HUBBARD CORPORATION
Balance Sheet
At December 31, 2021
Assets
Buildings	$	768,000
Land		304,000
Cash		78,000
Accounts receivable (net)		156,000
Inventory		276,000
Machinery		298,000
Patent (net)		118,000
Investment in equity securities		96,000
Total assets	$	2,094,000
Liabilities and Shareholders' Equity
Accounts payable	$	233,000
Accumulated depreciation		273,000
Notes payable		536,000
Appreciation of inventory		98,000
Common stock (authorized and issued 118,000 shares of no par stock)		472,000
Retained earnings		482,000
Total liabilities and shareholders' equity	$	2,094,000

Additional information:

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 $68,000 but, due to a significant increase in market value, is listed at $156,000. The increase in the land account was credited to retained earnings.
The investment in equity securities account consists of stocks of other corporations and are recorded at cost, $38,000 of which will be sold in the coming year. The remainder will be held indefinitely.
Notes payable are all long term. However, a $280,000 note requires an installment payment of $70,000 due in the coming year.
Inventory is recorded at current resale value. The original cost of the inventory is $178,000.

Required:
Prepare a corrected classified balance sheet for the Hubbard Corporation at December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)

Solutions

Expert Solution

Answer:

HUBBARD CORPORATION Balance Sheet As on December 31,2021
	Amount ($)	Amount ($)
Assets
Current Assets
Cash		78000
Marketable securities		38000
Accounts receivable (net)		156000
Inventories		178000
Total Current Assets		450000
Investments:
Marketable Securities (96000-38000)	58000
Land held for sale	68000
Total Investment		126000
Property Plant and Equipment
Land (304000-68000-(156000-68000))	148000
Building	768000
Machinary	298000
	1214000
Less: Accumulated depreciation Net property plant and equipment	273000	941000
Intangible assets
Patents		118000
Total Assets		1635000
Liabilities and Shareholders Equity
Current Liabilities
Accounts payable		233000
Current maturities of longterm debt		70000
Total current liabilities		303000
Long term liabilities
Notes payable (536000-70000)		466000
Shareholders Equity
Common Stock	472000
Retained earnings (482000-88000)	394000	866000
Total liabilities and shareholders equity		1635000

ekkarill92 answered 2 years ago

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