|
|
Debit
|
Credit
|
|
Accounts receivable
|
565,500
|
|
|
Building
|
350,000
|
|
|
Cash
|
105,000
|
|
|
Accrued payroll expense
|
|
125,000
|
|
Bad debt
|
10,000
|
|
|
Leasehold improvement
|
45,000
|
|
|
Financing receivables
|
550,000
|
|
|
Interest receivable
|
25,000
|
|
|
Amortization
|
30,000
|
|
|
Franchise
|
150,000
|
|
|
Bonds payable
|
|
375,000
|
|
Inventory
|
106,000
|
|
|
Gain on discontinued operations, net of tax
|
|
200,000
|
|
Salaries and benefits
|
415,000
|
|
|
Installment receivable
|
225,000
|
|
|
Accumulated other comprehensive loss
|
30,000
|
|
|
Land
|
280,000
|
|
|
Impairment
|
45,000
|
|
|
Coal reserves
|
32,000
|
|
|
Patent
|
25,000
|
|
|
Notes receivable
|
360,000
|
|
|
Accrued income taxes
|
|
190,000
|
|
Cost of goods sold
|
2,550,000
|
|
|
Property loss
|
100,000
|
|
|
Depletion
|
10,000
|
|
|
Oil Wells
|
468,000
|
|
|
Machinery
|
100,000
|
|
|
Deferred tax
|
|
90,000
|
|
Treasury bills
|
45,000
|
|
|
Pension payable
|
|
467,000
|
|
Prepaid rent
|
60,000
|
|
|
Customer list
|
25,000
|
|
|
Inventory loss
|
20,000
|
|
|
Investments
|
440,000
|
|
|
Building loss
|
30,000
|
|
|
Realized gross profit
|
|
38,000
|
|
Revolving credit line
|
|
160,000
|
|
Furniture and fixtures
|
200,000
|
|
|
Interest payable
|
|
30,000
|
|
Bond sinking fund
|
150,000
|
|
|
Research and development
|
115,000
|
|
|
Supplies
|
24,000
|
|
|
Gain on sale of investments
|
|
42,000
|
|
Trademark
|
30,000
|
|
|
Accounts payable
|
|
420,000
|
|
Restructuring
|
235,000
|
|
|
Preferred stock
|
|
300,000
|
|
General and administrative
|
210,000
|
|
|
Copyrights
|
50,000
|
|
|
Accumulated depreciation
|
|
120,000
|
|
Allowance for uncollectible accounts
|
|
50,000
|
|
Marketing and selling
|
150,000
|
|
|
Leasehold improvement
|
50,000
|
|
|
Deferred gross profit
|
|
105,000
|
|
Allowance for obsolete inventory
|
|
26,000
|
|
Income tax
|
400,000
|
|
|
Available for sale equity securities
|
35,000
|
|
|
Dividends payable
|
|
68,000
|
|
Goodwill
|
50,000
|
|
|
Timber
|
60,000
|
|
|
Common stock
|
|
400,000
|
|
Interest income
|
|
15,000
|
|
Depreciation
|
10,000
|
|
|
Capital lease
|
|
140,000
|
|
Loss on abandoned assets
|
50,000
|
|
|
Notes payable
|
|
500,000
|
|
Retained earnings
|
252,000
|
|
|
Unearned revenue
|
|
120,000
|
|
Treasury stock
|
50,000
|
|
|
Sales
|
|
5,422,000
|
|
Dividend income
|
|
14,500
|
|
Commercial paper
|
100,000
|
|
|
|
9,417,500
|
9,417,500
|
|
|
|
|
Listed below are account balances were taken from the adjusted trial balance of Alpha Inc. as of December 31, 2012.
The following is additional information with regards to amounts appearing in the trial balance above:
Accounts receivable relate to sales in the normal course of business and are due within 90 days of the related sale. There is a $125,000 note receivable included in the accounts receivable balance that have a due date of November 30, 2013.
Financing receivable relate to sales in the normal course of business on a revolving credit arrangement. Financing receivables are non-interest bearing and are expected to be collected at a rate of $10,000 per month.
Interest receivable is related to Company cash and other investments as is expected to be collected in February 2013.
Cash includes $55,000 of highly liquid equity securities designated by the Company board of directors for future building replacement and $20,000 of treasury notes maturing on January 15, 2013.
Investments include $120,000 of trading securities, $180,000 of debt securities with a maturity date of January 15, 2014, and $140,000 of money market funds.
Prepaid rent relates to an advance payment for the period from January 1, 2013 - August 31, 2013.
Notes receivable relate to a loan made to a Company affiliate. The note requires the affiliate to make payments on the first day of each month beginning on July 1, 2013 equal to principle of $10,000 plus interest at 4%.
Land includes a $140,000 property on which the Company has a factory, $50,000 of land which the Company has a sales office in that they plan to move out of and sell in 2015 for a gain, $50,000 of land that is being held for future expansion, and $40,000 of land adjacent to the land held for future expansion that the Company believes it can profit from as its value increases.
Capital lease includes an equipment lease, which requires principal payments of $1,000 per month, beginning on July 1, 2013.
Note payable includes a $200,000 note due December 31, 2013 and a $300,000 note, which requires payments of $20,000 plus 3% interest on the last day of each month beginning on April 1, 2013.
Treasury bills were purchased on the original issue date of November 25, 2012 and they mature on January 15, 2013
Bonds payable include on $75,000 bond maturing on March 30, 2014, a $200,000 serial bond, which requires semi-annual payments of $10,000 plus interest and a $100,000 bond due on June 30, 2013.
The Company can borrow in aggregate up to $500,000 on its revolving line of credit. The Company is required to sign individual notes with a 90 day maturity period each time it borrows. The notes related to the amounts currently borrowed mature on March 15, 2013. Payments of interest only on the outstanding balance are due each December 31. The revolving credit line agreement expires on December 31, 2014.
Common Stock includes the proceeds from 100,000 shares of $1 par value stock issued to investors at $4 per share. The Company charter authorizes the issue of 500,000 shares of common stock. Preferred stock includes 3000 shares of 5% stock issued at $100 per share.
Unearned revenue includes rent collected in advance at $7,000 per month for a portion of the company plant rented to another business.
Interest payable is due on January 3, 2013
One-half of the bond sinking fund balance is related to the $75,000 bond, one-quarter of the balance is related to the $100,000 bond and the remaining balance is related to the $200,000 bond.
Property loss arose from hurricane damage to a facility in Miami
Inventory loss relates to a write-down of the inventory carrying value because cost exceeded market value at December 31, 2012
Building loss relates to the destruction of a facility by invaders from outer space. The amount included in the trial balance is net of any related income tax impact
REQUIRED: Using all the information provided above prepare:
1/A balance sheet for Alpha, Inc. as of December 31, 2012. The balance sheet should be prepared in proper form and format including all relevant headings, sections, captions, titles, totals, subtotals and disclosures one would expect to see on the balance sheet. (List current assets, property plant equipment, noncurrent assets, current liabilities and noncurrent liabilities, Show calculations any!!!!)
2/A multiple-step income statement for Alpha for the year ending December 31, 2012. The income statement must be prepared in proper form and format including all relevant headings, sections, captions, titles, totals, subtotals, and disclosures one would normally expect on the face of the income statement. (Show calculations if any!!!!)
Case solutions must be prepared using excel.