Answered

The following is the ending balances of accounts at December 31, 2016, for the Vosburgh Electronics Corporation. Account Title Debits Credits Cash 67,000 Short-term investments 182,000 Accounts receivable 123,000 Long-term investments 35,000 Inventories 215,000 Loans to employees 40,000 Prepaid expenses (for 2017) 16,000 Land 280,000 Building 1,550,000 Machinery and equipment 637,000 Patent 152,000 Franchise 40,000 Note receivable 250,000 Interest receivable 12,000 Accumulated depreciation—building 620,000 Accumulated depreciation—equipment 210,000 Accounts payable 189,000 Dividends payable (payable on 1/16/17) 10,000 Interest payable 16,000 Taxes payable 40,000 Deferred revenue 60,000 Notes payable 300,000 Allowance for uncollectible accounts 8,000 Common stock 2,000,000 Retained earnings 146,000 Totals 3,599,000 3,599,000 Additional information:1. The common stock represents 1 million shares of no par stock authorized, 500,000 shares issued and outstanding.2. The loans to employees are due on June 30, 2017.3. The note receivable is due in installments of $50,000, 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 $50,000 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 $100,000 due on January 15, 2018, and another for $200,000 due on June 30, 2019.Required:Prepare a classified balance sheet for Vosburgh at December 31, 2016.

Answer :

mltn1980

Answer:

2016         Balance Sheet

$697,000  TOTAL CURRENT ASSETS  

$2,064,000  TOTAL NONCURRENT ASSETS  

$2,761,000  TOTAL ASSETS  

$303,000  TOTAL CURRENT LIABILITIES  

$312,000  TOTAL NONCURRENT LIABILITIES  

$615,000  TOTAL LIABILITIES  

$2,146,000  TOTAL EQUITY  

$2,761,000  TOTAL EQUITY + LIABILITIES

 

Explanation:

2016         Balance Sheet

$67,000  Cash

$132,000 Marketable Securities

$50,000  Treasury Bills

$115,000  Accounts Receivable

$215,000 Inventory

$16,000   Prepaid Expenses

$50,000  Note Receivable

$12,000   Interest Receivable

$40,000   Loans to Employees

$697,000  TOTAL CURRENT ASSETS  

$280,000 Land

$637,000 Machinery and Equipment

-$210,000 Accum Depreciation

$1550,000 Buildings

-$620,000 Accum Depreciation

$152,000 Patents

$40,000   Franchise

$200,000 Note Receivable

$35,000  Marketable Securities Long Term

$2,064,000  TOTAL NONCURRENT ASSETS  

$2,761,000  TOTAL ASSETS  

$189,000  Accounts Payable  

$40,000   Taxes Payable  

$48,000   Deferred Revenue  

$16,000    Interest Payable  

$10,000    Dividends Payable  

$303,000  TOTAL CURRENT LIABILITIES  

$12,000     Deferred Revenue  

$300,000  Notes Payable  

$312,000  TOTAL NONCURRENT LIABILITIES  

$615,000  TOTAL LIABILITIES  

$2,000,000  Common Stock  

$146,000  Retained Earnings  

$2,146,000  TOTAL EQUITY  

$2,761,000  TOTAL EQUITY + LIABILITIES  

  • Account of Current Assets , the criteria is to have a liquidity speed less than one year

Cash

Marketable Securities

Treasury Bills

Accounts Receivable

Inventory

Prepaid Expenses

Note Receivable

Interest Receivable

Loans to Employees

  • Account of Non Current Assets , the criteria is to have a liquidity speed more than one year and are known as fixed assets

Land

Machinery and Equipment

Accum Depreciation

Buildings

Accum Depreciation

Patents

Franchise

Note Receivable

Marketable Securities Long Term

  • Account of Current Liabilities , the criteria is to have a liquidity speed less of one year

Accounts Payable  

Taxes Payable  

Deferred Revenue  

Interest Payable  

Dividends Payable  

  • Account of Non Current Liabilities, the criteria is to have a liquidity speed more than one year and are known as long term financing

Deferred Revenue  

Notes Payable  

  • Account of Total Equity

Common Stock  

Retained Earnings  

Liquidity is defined as the speed of the assets that will be converted into cash, assets that take less days to buy or sell are more liquid than others.

Cash is the most liquid asset, then Accounts Receivable and Inventories for the end, in the middle there are different assets such as capital investments.

Prepaid expenses are not liquid because these accounts do not mean that the company can get cash unless the company has rights to something.

Other Questions