Question #1
Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.
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BRUNO COMPANY
BALANCE SHEET DECEMBER 31, 2012 |
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| Current assets | ||
| Cash | $261,870 | |
| Accounts receivable (net) | 341,870 | |
| Inventories (lower-of-average-cost-or-market) | 402,870 | |
| Equity investments (trading)—at cost (fair value $121,510) | 141,510 | |
| Property, plant, and equipment | ||
| Buildings (net) | 571,510 | |
| Equipment (net) | 161,510 | |
| Land held for future use | 176,510 | |
| Intangible assets | ||
| Goodwill | 81,870 | |
| Cash surrender value of life insurance | 91,870 | |
| Prepaid expenses | 13,870 | |
| Current liabilities | ||
| Accounts payable | 136,510 | |
| Notes payable (due next year) | 126,870 | |
| Pension obligation | 83,510 | |
| Rent payable | 50,870 | |
| Premium on bonds payable | 54,870 | |
| Long-term liabilities | ||
| Bonds payable | 501,510 | |
| Stockholders’ equity | ||
| Common stock, $1.00 par, authorized 400,000 shares, issued 291,870 | 291,870 | |
| Additional paid-in capital | 181,870 | |
| Retained earnings | ? | |
Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $161,870 and for the office equipment, $106,870. The allowance for doubtful accounts has a balance of $18,870. The pension obligation is considered a long-term liability. (List current assets in order of liquidity. List property plant and equipment in order of buildings and equipment.)
