Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Textbook Question
Chapter 15, Problem 15.4BPR
Investment reporting
Teasdale Inc. manufactures and sells commercial and residential security equipment. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 are provided below. Selected missing balances are shown by letters.
| Teasdale Inc. Balance Sheet December 31, Year 2 and Year 1 |
||
| Dec. 31, Year 2 | Dec. 31, Year 1 | |
| Cash | $160,000 | $ 156,000 |
| 11S.OOO | 108,000 | |
| Available for-sale investments (at cost)—Note 1 | $ a. | $ 91,200 |
| Plus valuation allowance for available-for-sale investments | b. | 8,776 |
| Available for-sale investments (fair value) | $ c | $ 99,976 |
| Interest receivable | $ d. | — |
| Investment in Wright Co. stock—Note 2 | e. | $ 69,200 |
| Office equipment (net) | 96,000 | 105,000 |
| Total assets | $ f. | 5538,176 |
| Accounts payable | $ 91,000 | $ 72,000 |
| Common stock | 80,000 | 80,000 |
| Excess of issue price over par | 250,000 | 250,000 |
| g | 127,400 | |
| Unrealized gain (loss) on available for-sale investments | h. | 8,776 |
| Total liabilities and |
S i. | 5538,176 |
Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, Year 1, are as follows:
| No. of Shares | Cost per Share | Total Cost | Total Fair Value | |
| Alvarez Inc stock | 960 | $38,00 | $36,480 | $39,936 |
| Hirsch Inc. stock | 1,900 | 28,80 | $4,720 | 60,040 |
| $91,200 | $99,976 |
Note 2. The Investment in Wright Co. stack is an equity method investment representing 30% of the outstanding shares of Wright Co.
The following selected investment transactions occurred during Year 2:
| Mar. 18. | Purchased 800 shares of Richter Inc. at $40, including brokerage commission. Richter is classified as an available-for-sale security. |
| July 12. | Dividends of $12,000 art: received on the Wright Co. investment. |
| Oct 1. | Purchased $24,000 of Toon Co. 4%, 10-year bonds at 100. the bonds are classified as available for sale. The bonds pay interest on October 1 and April 1. |
| December 31. | Wright Co. reported a total net income of $80,000 for Year 2. Teasdale recorder equity earnings for its share of Wright Co. net income. |
| 31. | Accrued interest for three months on the Toon Co. bonds purchased on October 1. |
| 31. | Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts: |
| Available for Sale Investments | Fair Value |
| Alvarez Inc. stock | $41,50 per share |
| Hirsch Inc stock | $26,00 per share |
| Richter Inc. stock | $48,00 per share |
| Toon Co. bonds | 101 per $ 100 of face amount |
31. Closed the Teasdale Inc. net income of $51,240. Teasdale Int. paid no dividends during the year.
Instructions
Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.
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XYZ provided the following financial information:
XYZBalance SheetAs of 12/31/19
Assets:
Liabilities and Equity:
Cash and marketable securities
$27,476
Accounts payable and accruals
$154,860
Accounts receivable
$143,519
Short-term notes payable
$21,255
Inventory
$212,379
Total current liabilities
$176,115
Total current assets
$383,374
Long term debt
$155,510
Net plant and equipment
$602,704
Total liabilities
$331,625
Goodwill and other assets
$42,422
Common stock
$312,719
Retained earnings
$384,156
Total assets
$1,028,500
Total liabilities and equity
$1,028,500
In addition, it was reported that the firm had a net income of:
$158,402
and net sales of:
$4,272,431
Calculate the following ratios for this firm (Use 365 days for calculation. Round answers to 2 decimal places, e.g.…
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Balance Sheet
As of 12/31/19
Assets:
Liabilities and Equity:
Cash and marketable securities
$28,987
Accounts payable and accruals
$154,807
Accounts receivable
$142,845
Short-term notes payable
$21,639
Inventory
$212,722
Total current liabilities
$176,446
Total current assets
$384,554
Long term debt
$155,510
Net plant and equipment
$602,309
Total liabilities
$331,956
Goodwill and cther assets
$42,422
Common stock
$314,932
Retained earnings
$382,397
Total assets
$1,029,285
Total liabilities and equity
$1,029,285
In addition, it was reported that the firm had a net income of:
$158,531
and net sales of:
$4,338,283
Calculate the following ratios for this firm (Use 365 days for calculation. Round answers to 2 decimal places, e.g. 52.75.):
Current Ratio
times
Quick Ratio
times
Average Collection Period
days
Total Asset Turnever
times
Fixed Asset Turnover
times
Question
BALANCE SHEET
INCOME STATEMENT
($ in millions)
($ in millions)
ASSETS
Cash & Marketable Securities
LIABILITIES
Revenue
Cost Of Goods Sold
28,681. 10
Accounts Payable
Salaries Payable
449.90
1,611.20
20,768.80
Accounts Receivable
954.80
225.20
Gross Profit
7.912.30
Inventories
3,645.20
Other Current Liabilities
1,118.80
Operating Expenses:
Selling, General & Admin.
Depreciation
Operating income
Other Current Assets
Total Current Assets
116.60
5,166.50
Total Current Liabilities
2,955.20
5,980.80
Other Liabilities
693.40
307.30
1,688.90
1,129.70
2,348.40
(575.60)
Machinery & Equipment
Land
1,624.20
Total Liabilities
3,648.60
Buildings
Depreciation
Property, Plant & Equip. - Net
Other Long Term Assets
Total Long-Term Assets
Interest
SHAREHOLDER'S EQUITY
Other Expense (Income)
(13.10)
4,591.40
120.90
828.50
5.401.70
1,637.30
618.10
1,019.20
Common Stock
Income Before Taxes
Retained Earnings
Total Shareholder's Equity
Income Taxes
4,712.30
6,230.20
Net Income
Total Assets
9,878.80
Total…
Chapter 15 Solutions
Accounting
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