In: Accounting
Corporation provided the following balance sheet for December 31 of the current year.
Carson Corporation
Balance Sheet
At December 31
Assets
Current Assets:
Cash $600,000
Investments at Fair Value 685,000
Accounts Receivable 235,000
Merchandise Inventory 910,000
Total Current Assets $2,430,000
Noncurrent Assets:
Investments in Affiliate Companies $90,000
Property, Plant, and Equipment – net 3,350,000
Equipment Under Capital Lease 370,000
Intangible Assets – net 330,500
Total Noncurrent Assets $4,140,500
Total Assets $6,570,500
Liabilities
Current Liabilities:
Accounts Payable $505,000
Current Portion of Long–Term Debt 340,000
Dividends Payable 8,000
Income Taxes Payable 170,000
Total Current Liabilities $1,023,000
Noncurrent Liabilities:
Bonds Payable, Due in 20 Years $800,000
Notes Payable, Due in 10 Years 735,000
Obligations Under Capital Leases 290,000
Deferred Tax Liability 290,000
Obligations Under Pension Plans 606,000
Total Noncurrent Liabilities $2,721,000
Total Liabilities $3,744,000
Stockholders' Equity
Common stock, $1 Par Value $620,000
Additional Paid–in Capital 920,000
Retained Earnings 1,516,500
Accumulated Other Comprehensive Loss (230,000)
Total Stockholders' Equity $2,826,500
Total Liabilities and Stockholders' Equity $6,570,500
Requirement
Restructure the balance sheet for December 31 of the current year using the report format with the following change in assumptions:
1. |
The investments at fair value are held in a noncurrent asset fund created for the purpose of liquidating long-term debt. |
2. |
The firm will use the earnings on fund investments to pay the current portion of long-term debt each year. |
BALANCE SHEET AS ON DECEMBER 31,
Assets | |
Current Assets: | |
Cash | $ 600,000.00 |
Accounts Receivable | $ 235,000.00 |
Merchandise Inventory | $ 910,000.00 |
Total Current Assets | $ 1,745,000.00 |
Non current Assets: | |
Investments at Fair Value | $ 685,000.00 |
Investments in Affiliate Companies | $ 90,000.00 |
Property, Plant, and Equipment | $ 3,350,000.00 |
Equipment Under Capital Lease | $ 370,000.00 |
Intangible Assets | $ 330,500.00 |
Total Noncurrent Assets | $ 4,825,500.00 |
Total Assets | $ 6,570,500.00 |
Liabilities and stockholders Equity | |
Current Liabilities: | |
Accounts Payable | $ 505,000.00 |
Current Portion of Long–Term Debt | $ 340,000.00 |
Dividends Payable | $ 8,000.00 |
Income Taxes Payable | $ 170,000.00 |
Total Current Liabilities | $ 1,023,000.00 |
Noncurrent Liabilities: | |
Bonds Payable, Due in 20 Years | $ 800,000.00 |
Notes Payable, Due in 10 Years | $ 735,000.00 |
Obligations Under Capital Leases | $ 290,000.00 |
Deferred Tax Liability | $ 290,000.00 |
Obligations Under Pension Plans | $ 606,000.00 |
Total Noncurrent Liabilities | $ 2,721,000.00 |
Stockholders Equity | |
Common stock, $1 Par Value | $ 620,000.00 |
Additional Paid–in Capital | $ 920,000.00 |
Retained Earnings | $ 1,516,500.00 |
Accumulated Other Comprehensive Loss | $ (230,000.00) |
Total Stockholders' Equity | $ 2,826,500.00 |
Total Liabilities and Stockholders' Equity | $ 6,570,500.00 |