Question

Listed below are account balances (in $millions) taken from the records of Symphony Stores. All of these are permanent accounts, except the last two that have yet to be closed. The installment receivables are current. Symphony uses a perpetual inventory system.

	Debit		Credit
Accounts receivable-trade	680
Building and equipment	920
Cash-checking	34
Installment receivables	50
Interest receivable	30
Inventory	16
Land	150
Note receivable Long-term	450
Petty cash funds	5
Prepaid expenses (for coming year)	20
Supplies	8
Trademark	40
Accounts payable-trade			560
Accumulated depreciation			80
Additional paid-in capital, common			485
Allowance for uncollectable accounts			20
Cash dividends payable			30
Common stock, at par			15
Income tax payable			65
Notes payable (long-term)			800
Retained earnings			48
Unearned revenues			40
Cash dividends declared-common	120
Income summary			380
TOTALS	2523		2523

What would Symphony report as total assets? Hint: Don t forget to deduct the contra assets.

What would Symphony report as total shareholders' equity? Hint: You will need to deduct dividends.

Answer 1

• Total Assets to be reported:

TOTAL ASSETS
Accounts receivable-trade	$          680.00
Allowance for uncollectable accounts	$          (20.00)	$                660.00
Building and equipment		$                920.00
Cash-checking		$                  34.00
Installment receivables		$                  50.00
Interest receivable		$                  30.00
Inventory		$                  16.00
Land		$                150.00
Note receivable Long-term		$                450.00
Petty cash funds		$                     5.00
Prepaid expenses (for coming year)		$                  20.00
Supplies		$                     8.00
Trademark		$                  40.00
TOTAL ASSETS		$            2,383.00

• Total Stockholder’s Equity to be reported:

Common stock, at par		$                  15.00
Additional paid-in capital, common		$                485.00
Retained earnings:
Beginning balance	$            48.00
Cash dividends declared-common	$        (120.00)
Income summary	$          380.00	$                308.00
Total Stockholder's Equity		$                808.00