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The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...

The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation.

Account Title Debits Credits
Cash 91,000
Short-term investments 206,000
Accounts receivable 147,000
Long-term investments 47,000
Inventory 227,000
Receivables from employees 52,000
Prepaid expenses (for 2022) 28,000
Land 292,000
Building 1,670,000
Equipment 649,000
Patent (net) 164,000
Franchise (net) 52,000
Notes receivable 310,000
Interest receivable 24,000
Accumulated depreciation—building 632,000
Accumulated depreciation—equipment 222,000
Accounts payable 201,000
Dividends payable (payable on 1/16/2022) 22,000
Interest payable 28,000
Income Taxes payable 52,000
Deferred revenue 72,000
Notes payable 324,000
Allowance for uncollectible accounts 20,000
Common stock 2,048,000
Retained earnings 338,000
Totals 3,959,000 3,959,000


Additional information:

  1. The common stock represents 1.1 million shares of no par stock authorized, 620,000 shares issued and outstanding.
  2. The receivables from employees are due on June 30, 2022.
  3. The notes receivable are due in installments of $62,000, payable on each September 30. Interest is payable annually.
  4. Short-term investments consist of securities that the company plans to sell in 2022 and $62,000 in treasury bills purchased on December 15 of the current year that mature on February 15, 2022. Long-term investments consist of securities that the company does not plan to sell in the next year.
  5. Deferred revenue represents payments from customer for extended service contracts. Eighty percent of these contracts expire in 2022, the remainder in 2023.
  6. Notes payable consists of two notes, one for $112,000 due on January 15, 2023, and another for $212,000 due on June 30, 2024.


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

Solutions

Expert Solution

Vosburgh Electronics Corporation

BALANCE SHEET

AT December 31 ,2021.

ASSETS
Current asset
Cash and cash equivalent (i) 153000
Accounts receivable (gross) 147000
Less:Allowance for uncollectible account -20000
Accounts receivable (net) 127000
Inventory 227000
Prepaid expense 28000
Short term investment (ii) 144000
Note receivable (current portion) 62000
Interest receivable 24000
Receivable from employees 52000
Total current asset 817000
Investment
Long-term investments 47000
Note receivable -Long term (iii) 248000
Total investment 295000
Property,Plant and equipment
Land 292000
Building 1670000
Less:Accumulated depreciation-building (-632000) 1038000
Equipment 649000
Less:Accumulated depreciation-building -222000 427000
Total Property,Plant and equipment 1757000
Intangible asset
Patent 164000
Franchise 52000
Total Intangible asset 216000
Total asset 3085000
LIABILITIES AND STOCKHOLDERS EQUITY
Current liability
Accounts payable 201000
Dividend payable 22000
Interest payable 28000
Income taxes payable 52000
Deferred revenue (current ) (iv) 57600
Total current liabilities 360600
Non current liabilities
Note payable 324000
Deferred revenue (non current) 14400
Total non current liabilities 338400
Total liabilities 699000
Stockholders equity
common stock 2048000
Retained earning 338000
Total stockholders equity 2386000
Total liabilities and stockholders equity 3085000

Working :

(i)Out of short term investment ,62000 is in treasury bill which is considered as cash equivalent.so Cash and cash equivalent = cash +cash equivalent

= 91000 +62000

= 153000

(ii)Short term investment = (206000-62000cash equivalent)= 144000

(iii)Note receivable -Long term = 310000-62000=248000

(iv)Deferred revenue (current ) = 72000*80%= 57600

(v)Deferred revenue (non-current ) = 72000-57600= 14400


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