question archive The following balance sheet was prepared for the Graves Company as of December 31, 2015by an inexperienced accountant
The following balance sheet was prepared for the Graves Company as of December 31, 2015by an inexperienced accountant
Subject:AccountingPrice: Bought3
The following balance sheet was prepared for the Graves Company as of December 31, 2015by an inexperienced accountant. You are to prepare a balance sheet in accordance withGAAP.Graves Co.Balance SheetAs of 12/31/15AssetsCurrent Assets:CashInvestment securitiesAccounts receivable, netInventoryOther current assetsTotal Current AssetsNoncurrent Assets:PPE, netTreasury stockOther noncurrent assetsTotal Noncurrent AssetsTotal Assets$ 12,5008,00021,35031,00014,200$87,050$ 64,8004,50013,600$ 82,900$169,950Liabilities & Shareholders’ EquityCurrent Liabilities:Accounts payable$ 3,400Other current liabilities2,000Total current liabilities$ 5,400Long-term liabilities32,750Total Liabilities$ 38,150Shareholders’ Equity:Common StockRetained EarningsTotal Shareholders’ EquityTotal Liabilities & Shareholders’Equity$ 50,00081,800$131,800$169,950Additional information you may need to prepare a proper balance sheet as of 12/31/15.SHOW YOUR WORK AND REASONING for each letter. If the information was handledcorrectly, STATE “no changes.â€a.b.c.d.e.f.g.h.PPE includes land purchased for $8,000 as an investment. It is scheduled to be soldduring 2016.Investment securities include $2,750 of stock that was purchased in order to give thecompany significant influence over a major supplier by obtaining a seat on their boardof directors.Other current assets include a $4,000 advance to the president of the company that hasno set maturity.Long-term liabilities include bonds payable of $10,500. Of this amount, $2,000represents bonds scheduled to be redeemed in 2016.Cash includes $4,000 that has been set aside to purchase machinery.Long-term liabilities include a $7,000 bank loan. On May 15, 2016, the loan becomesdue on demand.Cash in the amount of $18,000 has been placed in a restricted fund for the redemptionof preferred stock during 2016. Both the cash and the preferred stock have beenremoved from the balance sheet.On December 15, 2015, dividends of $3,500 were declared to be paid to shareholdersof record on January 25. Because these were merely declared, nothing was recorded.
