Classified Balance Sheet—Including Notes
Adjusted account balances and supplemental information for Brock bank Research Corp. as of December 31, 2008, are as follows:
|
Accounts Payable |
$ 32,160 |
|
Accounts Receivable—Trade |
57,731 |
|
Accumulated Depreciation—Leasehold Improvements and Equipment |
579,472 |
|
Additional Paid In Capital |
265,000 |
|
Allowance for Bad Debts |
1,731 |
|
Automotive Equipment |
132,800 |
|
Cash |
25,600 |
|
Cash Fund for Bond Retirement |
3,600 |
|
Common Stock |
35,000 |
|
Deferred Income Tax Liability |
45,000 |
|
Dividends Payable |
37,500 |
|
Franchises |
12,150 |
|
Furniture, Fixtures, and Store Equipment |
769,000 |
|
Insurance Claims Receivable |
120,000 |
|
Inventories |
201,620 |
|
Investment in Unconsolidated Subsidiary |
80,000 |
|
Land |
6,000 |
|
Leasehold Improvements |
65,800 |
|
7 1⁄2%–12% Mortgage Notes Payable |
200,000 |
|
Notes Payable—Banks (due in 2009) |
12,000 |
|
Notes Payable—Trade |
63,540 |
|
Patent Licenses |
57,402 |
|
Prepaid Insurance |
5,500 |
|
Profit Sharing, Payroll, and Vacation Payable |
40,000 |
|
Retained Earnings |
225,800 |
Supplemental information is as follows:
(a) Depreciation is provided by the straight line method over the estimated useful lives of the assets.
(b) Common stock is $1 par, and 35,000 of the 100,000 authorized shares were issued and are outstanding.
(c) The cost of an exclusive franchise to import a foreign company’s ball bearings and a related patent license are being amortized on the straight line method over their remaining lives: franchise, 10 years; patents, 15 years.
(d) Inventories are stated at the lower of cost or market; cost was determined by the specific identification method.
(e) Insurance claims based on the opinion of an independent insurance adjustor are for property damages at the central warehouse. These claims are estimated to be two thirds collectible in the following year and one third collectible thereafter.
(f) The company leases all of its buildings from various lessors. Estimated fixed lease obligations are $50,000 per year for the next 10 years. The leases do not meet the criteria for capitalization.
(g) The company is currently in litigation over a claimed overpayment of income tax of $13,000. In the opinion of counsel, the claim is valid. The company is contingently liable on guaranteed notes worth $12,000.
Instructions: Prepare a properly classified balance sheet. Include all notes and parenthetical notations necessary to properly disclose the essential financial data.