CA5 3 (Identifying Balance Sheet Deficiencies) The assets of Fonzarelli Corporation are presented on the next page (000s omitted).
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FONZARELLI CORPORATION |
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Assets |
$100,000 |
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Current assets |
27,500 |
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Cash |
37,000 |
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Unclaimed payroll checks |
75,000 |
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Debt investments (trading) (fair value $30,000) at cost |
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Accounts receivable (less bad debt reserve) |
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Inventory—at lower of cost (determined by the next in, |
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fi rst out method) or market |
240,000 |
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Total current assets |
479,500 |
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Tangible assets |
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Land (less accumulated depreciation) |
80,000 |
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Buildings and equipment |
$800,000 |
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Less: Accumulated depreciation |
250,000 |
550,000 |
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Net tangible assets |
630,000 |
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Long term investments |
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Stocks and bonds |
100,000 |
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Treasury stock |
70,000 |
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Total long term investments |
170,000 |
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Other assets |
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Discount on bonds payable |
19,400 |
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Sinking fund |
975,000 |
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Total other assets |
994,400 |
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Total assets |
$2,273,900 |
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Instructions
Indicate the deficiencies, if any, in the foregoing presentation of Fonzarelli Corporation’s assets.