Question

(Balance Sheet) Presented below is the trial balance of Hightower Corporation at December 31, 2020.

	Debit	Credit
Cash	295,000
Sales Revenue		$12,150,000
Debt Investments (trading) (at cost, $218,000)	230,000
Cost of Goods Sold	7,200,000
Debt Investments (long-term)	448,000
Equity Investments (long-term)	416,000
Notes Payable (short-term)		135,000
Accounts Payable		682,000
Selling Expenses	3,000,000
Investment Revenue		95,000
Land	390,000
Buildings	1,560,000
Dividends Payable		204,000
Accrued Liabilities		144,000
Accounts Receivable	652,000
Accumulated Depreciation–Buildings		228,000
Allowance for Doubtful Accounts		38,000
Administrative Expenses	1,350,000
Interest Expense	317,000
Inventory	895,000
Gain		120,000
Notes Payable (long-term)		1,350,000
Equipment	900,000
Bonds Payable		1,500,000
Accumulated Depreciation–Equipment		90,000
Franchises	240,000
Common Stock ($5 par)		1,500,000
Treasury Stock	287,000
Patents	293,000
Retained Earnings		117,000
Paid-in Capital in Excess of Par		120,000
Totals	$18,473,000	$18,473,000

Instructions

Compute each of the following:

1.   Total current assets

2.   Total property, plant, and equipment

3.   Total assets

4.   Total liabilities

5.   Total stockholders’ equity

Answer 1

Solution

1) Current Assets $20,34,000

2) Property, Plant & Equipment $ 25,32,000

3) Total Assets $ 59,63,000

4) Total Liabilities $ 40,15,000

5) Total Stockholder's Equity $ 20,48,000

Current Assets:
Cash		295,000
Treding securities		230,000
Accounts receivable	652,000
Less: Allowances for doubtful accounts	-38,000	614,000
Inventory		895,000
Total current assets			20,34,000
Long-term Investments:
Debt investments		448,000
Equity investments		416,000
Total long-term investments			864,000
Property,Plant, and Equipment:
Land		390,000
Buildings	15,60,000
Less: Accumulated depreciation	-228,000	13,32,000
Equipment	900,000
Less: Accumulated depreciation-Equipment	-90,000	810,000
Total property,plant, and equipment			25,32,000
Intangible Assets:
Franchises		240,000
Patents		293,000
Total intangiable assets			533,000
Total assets			59,63,000
Liabilities and Stockholders' Equity
Current Libilities:
Accounts payable		682,000
Short-term notes payable		135,000
Dividends payable		204,000
Accured libilities		144,000
Total current libilities			1165,000
Long-term Liabilities:
Long-term notes payable		13,50,000
Bond payable		15,00,000
Total long term liabilities			28,50,000
Total liabilities			40,15,000
Stockholders' Equity:
Paid-in-capital:
Common stock ($5 par)	15,00,000
Paid-in capital in excess of par	120,000	16,20,000
Retained earnings		615,000
Total paid-in-capital and retained earnings		22,35,000
Less: Treasury stock		-287,000
Total stockholders equity			20,48,000
Total liabilities and stockholders equity			5963,000

Balance of retained earnings shown in the balance sheet above has been calculated in the following manner:

Sales	12,150,000
Cost of goods sold	-72,00000
Gross profit	49,50,000
Less operating expenses:
Selling expenses	-30,00,000
Administrative expenses	-13,50,000
Operating income	600,000
Other income and expenses:
Investment revenue	95,000
Interest expense	-317,000
Income before extraordinary item	378,000
Extraordinary gain	120,000
Net income	498,000
Beginning retained earnings	117,000
Ending retained earnings	615,000 (598,000+117,000)

Please give thumbs up :-)