(Balance Sheet Adjustment and Preparation) The adjusted trial balance of Eastwood Company and other related information for the year 2012 are presented on the next page.
|
EASTWOOD COMPANY |
||
|
Debits |
Credits |
|
|
Cash |
$41,000 |
|
|
Accounts Receivable |
163,500 |
|
|
Allowance for Doubtful Accounts |
$8,700 |
|
|
Prepaid Insurance |
5,900 |
|
|
Inventory |
208,500 |
|
|
Equity Investments (long term) |
339,000 |
|
|
Land |
85,000 |
|
|
Construction in Process (building) |
124,000 |
|
|
Patents |
36,000 |
|
|
Equipment |
400,000 |
|
|
Accumulated Depreciation—Equipment |
240,000 |
|
|
Discount on Bonds Payable |
20,000 |
|
|
Accounts Payable |
148,000 |
|
|
Accrued Expenses |
49,200 |
|
|
Notes Payable |
94,000 |
|
|
Bonds Payable |
200,000 |
|
|
Common Stock |
500,000 |
|
|
Paid in Capital in Excess of Par—Common Stock |
45,000 |
|
|
Retained Earnings |
138,000 |
|
|
$1,422,900 |
$1,422,900 |
|
Additional information:
1. The LIFO method of inventory value is used.
2. The cost and fair value of the long term investments that consist of stocks and bonds is the same.
3. The amount of the Construction in Progress account represents the costs expended to date on a building in the process of construction. (The company rents factory space at the present time.) The land on which the building is being constructed cost $85,000, as shown in the trial balance.
4. The patents were purchased by the company at a cost of $40,000 and are being amortized on a straight line basis.
5. Of the discount on bonds payable, $2,000 will be amortized in 2013.
6. The notes payable represent bank loans that are secured by long term investments carried at $120,000. These bank loans are due in 2013.
7. The bonds payable bear interest at 8% payable every December 31, and are due January 1, 2023.
8. 600,000 shares of common stock of a par value of $1 were authorized, of which 500,000 shares were issued and outstanding.
Instructions
Prepare a balance sheet as of December 31, 2012, so that all important information is fully disclosed.