The following is a December 31, 2011, post-closing trial balance for Culver City Lighting, Inc.
Account Title
Cash
Accounts receivable
Inventories
Prepaid insurance
Equipment
Accumulated depreciation—equipment
Patent, net
Accounts payable
Interest payable
Note payable (due in 10, equal annual
installments)
Common stock
Retained earnings
Totals
Debits
58,000
40,000
45,500
16,000
103,500
Credits
33,600
41,700
34,660
2,040
94,000
66,500
73,900
304,700
304,700
Prepare a classified balance sheet for Culver City Lighting, Inc. (Be sure to list the assets and
liabilities in order of their liquidity. Input all amounts as positive values. Omit the "$" sign in your
response.)
Culver City Lighting, Inc.
Balance Sheet
At December 31, 2011
Assets
Current assets:
(Click to select)
$
(Click to select)
(Click to select)
(Click to select)
Total current assets
Property, plant, and equipment:
(Click to select)
$
(Click to select)
Net property, plant, and equipment
Intangible assets:
(Click to select)
Total assets
$
Liabilities and Shareholders' Equity
Current liabilities:
(Click to select)
$
(Click to select)
(Click to select)
Total current liabilities
Long-term liabilities:
(Click to select)
Shareholders' equity:
(Click to select)
$
(Click to select)
Total shareholders' equity
Total liabilities and shareholders' equity
$
You have been asked to review the December 31, 2011, balance sheet for Champion Cleaning. After
completing your review, you list the following three items for discussion with your superior:
1.An investment of $38,000 is included in current assets. Management has indicated that it has no
intention of liquidating the investment in 2012.
2.A $140,000 note payable is listed as a long-term liability, but you have determined that the note is due
in 10, equal annual installments with the first installment due on March 31, 2012.
3.Unearned revenue of $66,000 is included as a current liability even though only two-thirds will be
earned in 2012.
1.
Determine the appropriate classification of each of these items. (Omit the "$" sign in your response.)
2.
Amount
Classification
1. Investment
$
2. Next year's installment
$
Balance
3. Unearned revenue
Balance
$
$
$
(Click to select)
(Click to select)
(Click to select)
(Click to select)
(Click to select)
For each of the following note disclosures, indicate whether the disclosure would likely appear in (A) the
summary of significant accounts policies or (B) a separate note:
Note disclosures
(1) Depreciation method
(2) Contingency information
(3) Significant issuance of common stock after the fiscal year-end
(4) Cash equivalent designation
(5) Long-term debt information
(6) Inventory costing method
A/B
(Click to select)
(Click to select)
(Click to select)
(Click to select)
(Click to select)
(Click to select)
The following are the typical classifications used in a balance sheet:
a.
b.
c.
d.
e.
Current assets
Investments and funds
Property, plant, and equipment.
Intangible assets
Other assets
f.
g.
h.
i.
Current liabilities
Long-term liabilities
Paid-in-capital
Retained earnings
Required:
For each of the following balance sheet items, use the letters above to indicate the appropriate
classification category. (If the item is a contra account, select the appropriate letter with a minus
sign.)
1. (Click to select)
Equipment
10. (Click to select)
Inventories
2. (Click to select)
Accounts payable
11. (Click to select)
Patent
3. (Click to select)
Allowance for uncollectible accounts
12. (Click to select)
4. (Click to select)
Land, held for investment
13. (Click to select)
5. (Click to select)
Note payable, due in 5 years
14. (Click to select)
6. (Click to select)
Unearned rent revenue
15. (Click to select)
Common stock
7. (Click to select)
Note payable, due in 6 months
16. (Click to select)
Building, in use
8. (Click to select)
Income less dividends, accumulated
17. (Click to select)
Cash
9. (Click to select)
Investment in XYZ Corp., long-term
18. (Click to select)
Taxes payable
Land, in use
Accrued
liabilities
Prepaid rent
The following balance sheet for the Los Gatos Corporation was prepared by a recently hired accountant.
In reviewing the statement you notice several errors.
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2011
Assets
Cash
Accounts
receivable
Inventories
Machinery
(net)
Franchise
(net)
Total
assets
Liabilities
and
Shareholders’
Equity
Accounts
payable
Allowance for
uncollectible
accounts
Note payable
Bonds
payable
Shareholders’
equity
Total
liabilities and
shareholders’
equity
$
39,700
75,000
55,000
117,000
30,100
$
316,800
$
45,000
4,688
58,100
107,500
101,512
$
316,800
Additional information:
1. Cash includes a $19,850 bond sinking fund to be used for repayment of the bonds payable in 2015.
2. The cost of the machinery is $140,600.
3. Accounts receivable includes a $18,750 note receivable from a customer due in 2014.
4. The note payable includes accrued interest of $5,282. Principal and interest are both due on February
1, 2012.
5. The company began operations in 2006. Income less dividends since inception of the company totals
$67,675.
6. 48,250 shares of no par common stock were issued in 2006. 96,500 shares are authorized.
Required:
Prepare a corrected, classified balance sheet. (Be sure to list the assets and liabilities in order of
their liquidity. Input all amounts as positive values. Omit the "$" sign in your response.)
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2011
Assets
Current assets:
(Click to select)
$
(Click to select)
(Click to select)
Total current assets
Investments:
$
Total investments
Property, plant, and equipment:
(Click to select)
(Click to select)
Net property, plant, and equipment
Intangible assets:
(Click to select)
Total assets
$
Liabilities and Shareholders' Equity
Current liabilities:
(Click to select)
$
(Click to select)
(Click to select)
Total current liabilities
Long-term liabilities:
(Click to select)
Shareholders’ equity:
(Click to select)
(Click to select)
Total shareholders’ equity
$
Total liabilities and shareholders' equity
$
The 2011 balance sheet for Hallbrook Industries, Inc. is shown below.
HALLBROOK INDUSTRIES, INC.
Balance Sheet
December 31, 2011
($ in 000s)
Assets
Cash
Short-term
investments
Accounts
receivable
Inventories
Property,
plant, and
equipment
(net)
Total
assets
Liabilities
and
Shareholders’
Equity
Current
liabilities
Long-term
liabilities
Paid-in
capital
Retained
earnings
Total
liabilities and
shareholders’
equity
$
240
210
240
320
980
$1,990
$
410
380
790
410
$
1,990
The company’s 2011 income statement reported the following amounts ($ in 000s):
Net sales
Interest expense
Income tax expense
Net income
$4,790
230
290
350
Required:
Determine the following ratios for 2011 (Round your answers to 2 decimal places):
1. Current ratio
2. Acid-test ratio
3. Debt to equity ratio
4. Times interest earned ratio
times