question archive The following is the balance sheet of McDonald Company: Assets Current assets: McDONALD COMPANY December 31, 2008 Cash (including $10,000 restricted for payment of note) $ 40,000 Marketable equity securities 20,000 Accounts receivable, less allowance for doubtful accounts of $12,000 70,000 Inventory 60,000 Total current assets $190,000 Plant assets: Land $ 40,000 Buildings, net 100,000 Equipment $80,000 Less: Accumulated depreciation 20,000 60,000 Patent 20,000 Organizational costs 15,000 Other assets: 235,000 Prepaid insurance 5,000 Total assets $430,000 (continued) Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 60,000 Wages payable 10,000 Notes payable, due July 1, 2012 20,000 Bonds payable, due December 2016 100,000 Total current liabilities $190,000 Dividends payable 4,000 Deferred tax liability, long term Stockholders’ equity: Common stock ($10 par, 10,000 30,000 shares authorized, 5,000 shares outstanding) $ 50,000 Retained earnings Total stockholders’ equity 156,000 206,000 Total liabilities and stockholders’ equity $430,000 Required Indicate your criticisms of the balance sheet and briefly explain the proper treatment of any item criticized
The following is the balance sheet of McDonald Company: Assets Current assets: McDONALD COMPANY December 31, 2008 Cash (including $10,000 restricted for payment of note) $ 40,000 Marketable equity securities 20,000 Accounts receivable, less allowance for doubtful accounts of $12,000 70,000 Inventory 60,000 Total current assets $190,000 Plant assets: Land $ 40,000 Buildings, net 100,000 Equipment $80,000 Less: Accumulated depreciation 20,000 60,000 Patent 20,000 Organizational costs 15,000 Other assets: 235,000 Prepaid insurance 5,000 Total assets $430,000 (continued) Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 60,000 Wages payable 10,000 Notes payable, due July 1, 2012 20,000 Bonds payable, due December 2016 100,000 Total current liabilities $190,000 Dividends payable 4,000 Deferred tax liability, long term Stockholders’ equity: Common stock ($10 par, 10,000 30,000 shares authorized, 5,000 shares outstanding) $ 50,000 Retained earnings Total stockholders’ equity 156,000 206,000 Total liabilities and stockholders’ equity $430,000 Required Indicate your criticisms of the balance sheet and briefly explain the proper treatment of any item criticized
Subject:AccountingPrice: Bought3
The following is the balance sheet of McDonald Company:
Assets
Current assets:
McDONALD COMPANY
December 31, 2008
Cash (including $10,000 restricted for payment of note) $ 40,000
Marketable equity securities 20,000
Accounts receivable, less allowance
for doubtful accounts of $12,000 70,000
Inventory 60,000
Total current assets $190,000
Plant assets:
Land $ 40,000
Buildings, net 100,000
Equipment $80,000
Less: Accumulated depreciation 20,000 60,000 Patent 20,000
Organizational costs 15,000
Other assets:
235,000
Prepaid insurance 5,000
Total assets $430,000
(continued)
Liabilities and Stockholders’ Equity
Current liabilities:
|
Accounts payable |
$ 60,000 |
|
|
Wages payable |
10,000 |
|
|
Notes payable, due July 1, 2012 |
20,000 |
|
|
Bonds payable, due December 2016 |
100,000 |
|
|
Total current liabilities |
|
$190,000 |
|
Dividends payable |
|
4,000 |
|
Deferred tax liability, long term Stockholders’ equity: Common stock ($10 par, 10,000 |
|
30,000 |
|
shares authorized, 5,000 shares outstanding) |
$ 50,000 |
|
|
Retained earnings Total stockholders’ equity |
156,000 |
206,000 |
|
Total liabilities and stockholders’ equity |
|
$430,000 |
Required Indicate your criticisms of the balance sheet and briefly explain the proper treatment of any item criticized.
