Reference no: EM13920523

Listed below are account balances taken from the adjusted trial balance of Alpha Inc. as of December 31, 2012.

	Debit	Credit
Accounts receivable	565,500
Building	350,000
Cash	105,000
Accrued payroll expense		125,000
Bad debt	10,000
Leasehold improvement	45,000
Financing receivables	550,000
Interest receivable	25,000
Amortization	30,000
Franchise	150,000
Bonds payable		375,000
Inventory	106,000
Gain on discontinued operations, net of tax		200,000
Salaries and benefits	415,000
Installment receivable	225,000
Accumulated other comprehensive loss	30,000
Land	280,000
Impairment	45,000
Coal reserves	32,000
Patent	25,000
Notes receivable	360,000
Accrued income taxes		190,000
Cost of goods sold	2,550,000
Property loss	100,000
Depletion	10,000
Oil Wells	468,000
Machinery	100,000
Deferred tax		90,000
Treasury bills	45,000
Pension payable		467,000
Prepaid rent	60,000
Customer list	25,000
Inventory loss	20,000
Investments	440,000
Building loss	30,000
Realized gross profit		38,000
Revolving credit line		160,000
Furniture and fixtures	200,000
Interest payable		30,000
Bond sinking fund	150,000
Research and development	115,000
Supplies	24,000
Gain on sale of investments		42,000
Trademark	30,000
Accounts payable		420,000
Restructuring	235,000
Preferred stock		300,000
General and administrative	210,000
Copyrights	50,000
Accumulated depreciation		120,000
Allowance for uncollectible accounts		50,000
Marketing and selling	150,000
Leasehold improvement	50,000
Deferred gross profit		105,000
Allowance for obsolete inventory		26,000
Income tax	400,000
Available for sale equity securities	35,000
Dividends payable		68,000
Goodwill	50,000
Timber	60,000
Common stock		400,000
Interest income		15,000
Depreciation	10,000
Capital lease		140,000
Loss on abandoned assets	50,000
Notes payable		500,000
Retained earnings	252,000
Unearned revenue		120,000
Treasury stock	50,000
Sales		5,422,000
Dividend income		14,500
Commercial paper	100,000
	9,417,500	9,417,500

 The following is additional information with regards to amounts appearing in the trial balance above:

Accounts receivable relate to sales in the normal course of business and are due within 90 days of the related sale. There is a $125,000 note receivable included in the accounts receivable balance that has a due date of November 30, 2013.

Financing receivable relate to sales in the normal course of business on a revolving credit arrangement. Financing receivables are non-interest bearing and are expected to be collected at a rate of $10,000 per month.

Interest receivable is related to Company cash and other investments as is expected to be collected in February 2013.

Cash includes $55,000 of highly liquid equity securities designated by the Company board of directors for future building replacement and $20,000 of treasury notes maturing on January 15, 2013.

Investments include $120,000 of trading securities, $180,000 of debt securities with a maturity date of January 15, 2014, and $140,000 of money market funds.

Prepaid rent relates to an advance payment for the period from January 1, 2013 - August 31, 2013.

Notes receivable relate to a loan made to a Company affiliate. The note requires the affiliate to make payments on the first day of each month beginning on July 1, 2013 equal to principle of $10,000 plus interest at 4%.

Land includes a $140,000 property on which the Company has a factory, $50,000 of land which the Company has a sales office in that they plan to move out of and sell in 2015 for a gain, $50,000 of land that is being held for future expansion, and $40,000 of land adjacent to the land held for future expansion that the Company believes it can profit from as its value increases.

Capital lease includes an equipment lease, which requires principal payments of $1,000 per month, beginning on July 1, 2013.

Note payable includes a $200,000 note due December 31, 2013 and a $300,000 note, which requires payments of $20,000 plus 3% interest on the last day of each month beginning on April 1, 2013.

Treasury bills were purchased on the original issue date of November 25, 2012 and they mature on January 15, 2013

Bonds payable include on $75,000 bond maturing on March 30, 2014, a $200,000 serial bond, which requires semi annual payments of $10,000 plus interest and a $100,000 bond due on June 30, 2013.

The Company can borrow in aggregate up to $500,000 on its revolving line of credit. The Company is required to sign individual notes with a 90 day maturity period each time it borrows. The notes related to the amounts currently borrowed mature on March 15, 2013. Payments of interest only on the outstanding balance are due each December 31. The revolving credit line agreement expires on December 31, 2014.

Common Stock includes the proceeds from 100,000 shares of $1 par value stock issued to investors at $4 per share. The Company charter authorizes the issue of 500,000 shares of common stock. Preferred stock includes 3000 shares of 5% stock issued at $100 per share.

Unearned revenue includes rent collected in advance at $7,000 per month for a portion of the company plant rented to another business.

Interest payable is due on January 3, 2013

One half of the bond sinking fund balance is related to the $75,000 bond, one quarter of the balance is related to the $100,000 bond and the remaining balance is related to the $200,000 bond.

Property loss arose from hurricane damage to a facility in Miami

Inventory loss relates to a write down of the inventory carrying value because cost exceeded market value at December 31, 2012

Building loss relates to the destruction of a facility by invaders from outer space. The amount included in the trial balance is net of any related income tax impact

REQUIRED: Using all the information provided above prepare:

1/A balance sheet for Alpha, Inc. as of December 31, 2012. The balance sheet should be prepared in proper form and format including all relevant headings, sections, captions, titles, totals, subtotals and disclosures one would expect to see on the balance sheet. (List current assets, property plant equipment, non current assets, current liabilities and non current liabilities, Show calculations if any!!!!)

2/A multiple step income statement for Alpha for the year ending December 31, 2012. The income statement must be prepared in proper form and format including all relevant headings, sections, captions, titles, totals, subtotals, and disclosures one would normally expect on the face of the income statement. (Show calculations if any!!!!)

Case solutions must be prepared using excel.