Reference no: EM131578983

Problem 1 - Current Assets Section of the Balance Sheet

Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2017.

Inventory (finished goods)	$52,000	Cost of Goods Sold	$   2,100,000
Unearned Service Revenue	90,000	Notes Receivable	40,000
Equipment	253,000	Accounts Receivable	161,000
Inventory (work in process)	34,000	Inventory (raw materials)	207,000
Cash	37,000	Supplies Expense	60,000
Debt Investments (short-term)	31,000	Allow. for Doubtful Accounts	12,000
Customer Advances	36,000	Licenses	18,000
Restricted Cash for Plant Expansion	50,000	Additional Paid-in Capital	88,000
		Treasury Stock	22,000

The following additional information is available.

1. Inventories are valued at lower-of-cost-or-market using LIFO.

2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $50,600.

3. The short-term investments have a fair value of $29,000. (Assume they are trading securities.)

4. The notes receivable are due April 30, 2019, with interest receivable every April 30.

The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2017.)

5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $50,000 are pledged as collateral on a bank loan.

6. Licenses are recorded net of accumulated amortization of $14,000.

7. Treasury stock is recorded at cost.

Instructions - Prepare the current assets section of Yasunari Kawabata Company's December 31, 2017, balance sheet, with appropriate disclosures.

Problem 2 - Balance Sheet Preparation

Presented below is the adjusted trial balance of Kelly Corporation at December 31, 2017.

Kelly Corporation  Trial Balance   December 31, 2017
	Debit	Credit
Cash	$                ?
Supplies	1,200
Prepaid Insurance	1,000
Equipment	48,000
Accumulated Depreciation - Equipment		$       4,000
Trademarks	950
Accounts Payable		10,000
Salaries and Wages Payable		500
Unearned Service Revenue		2,000
Bonds Payable (due 2024)		9,000
Common Stock		10,000
Retained Earnings		25,000
Service Revenue		10,000
Salaries and Wages Expense	9,000
Insurance Expense	1,400
Rent Expense	1,200
Interest Expense	900
Total	?	?

Additional information:

1. Net loss for the year was $2,500.

2. No dividends were declared during 2017.

Instructions: Prepare a classified balance sheet as of December 31, 2017.

Problem 3 - Current Liabilities

Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year.

(a) On December 20, 2017, a former employee filed a legal action against Baylor for 5100,000 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote.

(b) Bonuses to key employees based on net income for 2017 are estimated to be 5150,000.

(c) On December 1, 2017, the company borrowed 56013,000 at 8% per year. Interest is paid quarterly.

(d) Accounts receivable at December 31, 2017, is $10,000,000. An aging analysis indicates that Baylor's expense provision (or doubtful accounts is estimated to be 3% of the receivables balance.

(e) On December 15, 2017, the company declared a 52.00 per share dividend on the 40,000 shares of common stock outstanding, to be paid on January 5, 2018.

(f) During the year, customer advances of 5160,000 were received; 550,000 of this amount was earned by December 31, 2017.

Instructions - For each item above, indicate the dollar amount to be reported as a current liability. If a liability is not reported, explain why.

Problem 4 -

On 1/1/2011, ABC Company purchased a piece of equipment costing $60,000. The equipment is expected to have a useful life equal to 4 years and a salvage value equal to $10,000.

What is the depreciation expense for each for the following years under

i) straight-line depreciation method

ii) double-declining balance method

ii) sum-of-years'-digits' method?

Attachment:- Assignment.rar