Question

The following is the ending balances of accounts at December 31, 2016, for the Vosburgh Electronics Corporation.

Account Title	Debits			Credits
Cash		105,000
Short-term investments		220,000
Accounts receivable		161,000
Long-term investments		54,000
Inventories		234,000
Loans to employees		59,000
Prepaid expenses (for 2017)		35,000
Land		299,000
Building		1,740,000
Machinery and equipment		656,000
Patent		171,000
Franchise		59,000
Note receivable		345,000
Interest receivable		31,000
Accumulated depreciation—building					639,000
Accumulated depreciation—equipment					229,000
Accounts payable					208,000
Dividends payable (payable on 1/16/17)					29,000
Interest payable					35,000
Taxes payable					59,000
Deferred revenue					79,000
Notes payable					338,000
Allowance for uncollectible accounts					27,000
Common stock					2,076,000
Retained earnings					450,000
Totals		4,169,000			4,169,000

  

Additional information:

1.	The common stock represents 1.6 million shares of no par stock authorized, 690,000 shares issued and outstanding.
2.	The loans to employees are due on June 30, 2017.
3.	The note receivable is due in installments of $69,000, payable on each September 30. Interest is payable annually.
4.	Short-term investments consist of marketable equity securities that the company plans to sell in 2017 and $69,000 in treasury bills purchased on December 15 of the current year that mature on February 15, 2017. Long-term investments consist of marketable equity securities that the company does not plan to sell in the next year.
5.	Deferred revenue represents customer payments for extended service contracts. Eighty percent of these contracts expire in 2017, the remainder in 2018.
6.	Notes payable consists of two notes, one for $119,000 due on January 15, 2018, and another for $219,000 due on June 30, 2019.

Required:

Prepare a classified balance sheet for Vosburgh at December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Balance sheet
Assets
Current Assets:
Cash and cash equivalents	$     174,000
Marketable securities	$     151,000
Accounts receivable (net)	$     134,000
Loans to employees	$        59,000
Interest receivable	$        31,000
Note receivable—current portion	$        69,000
Inventories	$     234,000
Prepaid expenses	$        35,000
Total current assets		$     887,000
Investments:
Marketable securities	$        54,000
Note receivable	$     276,000
Total investments		$     330,000
Property, plant, and equipment:
Land	$     299,000
Buildings	$ 1,740,000
Machinery and equipment	$     656,000
Less: Accumulated depreciation	$   (868,000)
Net property, plant, and equipment		$ 1,827,000
Intangible assets:
Patent	$     171,000
Copyright	$        59,000
Total intangible assets		$     230,000
Total assets		$ 3,274,000
Liabilities & Stockholder's Equity
Current liabilities:
Accounts Payable	$     208,000
Notes payable	$     119,000
Interest Payable	$        35,000
Taxes payable	$        59,000
Dividend payable	$        29,000
Deferred Revenue	$        63,200
Total current liabilities		$     513,200
Long-term liabilities:
Notes payable	$     219,000
Deferred Revenue	$        15,800
Total long-term liabilities		$     234,800
Stockholder's Equity
Common stock, no par, 1600000 shares authorized,690,000 shares issued and outstanding	$ 2,076,000
Retained Earnings	$     450,000
Total StockHolder's Equty		$ 2,526,000
Total Liabilities & Stockholder's Equity		$ 3,274,000

Cash and cash equivalents
Cash	$        105,000
Treasury bills	$          69,000
Total cash and Cash Equi.	$        174,000

Please look at adjustments below:

Assets
Current Assets:
Cash and cash equivalents	=I8
Marketable securities	=220000-69000
Accounts receivable (net)	=161000-27000
Loans to employees	59000
Interest receivable	31000
Note receivable—current portion	69000
Inventories	234000
Prepaid expenses	35000
Total current assets		=SUM(B5:B13)
Investments:
Marketable securities	54000
Note receivable	=345000-69000
Total investments		=SUM(B15:B16)
Property, plant, and equipment:
Land	299000
Buildings	1740000
Machinery and equipment	656000
Less: Accumulated depreciation	=-639000-229000
Net property, plant, and equipment		=SUM(B19:B22)
Intangible assets:
Patent	171000
Copyright	59000
Total intangible assets		=SUM(B25:B26)
Total assets		=C27+C23+C17+C13
Liabilities & Stockholder's Equity
Current liabilities:
Accounts Payable	208000
Notes payable	=338000-219000
Interest Payable	35000
Taxes payable	59000
Dividend payable	29000
Deferred Revenue	=79000*0.8
Total current liabilities		=SUM(B31:B36)
Long-term liabilities:
Notes payable	219000
Deferred Revenue	=79000*0.2
Total long-term liabilities		=SUM(B39:B40)
Stockholder's Equity
Common stock, no par, 1600000 shares authorized,690,000 shares issued and outstanding	2076000
Retained Earnings	450000
Total StockHolder's Equty		=SUM(B43:B44)
Total Liabilities & Stockholder's Equity		=C45+C41+C37
		=C46-C28

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