Chapter 5: 13Q (page 237)
The New York Knicks, Inc. sold 10,000 season tickets at $2,000 each. By December 31, 2017, 16 of the 40 home games had been played. What amount should be reported as a current liability at December 31, 2017?
The business entity will report a current liability of$12,000,000.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
What is working capital? How does working capital relate to the operating cycle?
EXCEL (Current Assets Section of the Balance Sheet) Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2017.
Inventory | \(52,000 | Cost of goods sold | 2,100,000 | |
Unearned service revenue | 90,000 | Note receivable | 40,000 | |
Equipment | 253,000 | Account receivable | 161,000 | |
Inventory (Work-in-process) | 34,000 | Inventory (raw material) | 207,000 | |
Cash | 37,000 | Supplies Expenses | 60,000 | |
Debt investment (Short-term) | 31,000 | Allowance for doubtful accounts | 12,000 | |
Customer advances | 36,000 | License | 18,000 | |
Restricted cash for plant expansion | 50,000 | Additional paid-in-capital | 88,000 | |
Treasury stock | 22,000 |
The following additional information is available.
1. Inventories are valued at lower-of-cost or market using LIFO.
2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is \)50,600.
3. The short-term investments have a fair value of \(29,000. (Assume they are trading securities.)
4. The notes receivable are due April 30, 2019, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2017.)
5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of \)50,000 are pledged as collateral on a bank loan.
6. Licenses are recorded net of accumulated amortisation of $14,000.
7. Treasury stock is recorded at cost.
Instructions
Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2017, balance sheet, with appropriate disclosures.
BE5-1 (L03) Harding Corporation has the following accounts included in its December 31, 2017, trial balance: Accounts Receivable \(110,000, Inventory \)290,000, Allowance for Doubtful Accounts \(8,000, Patents \)72,000, Prepaid Insurance \(9,500, Accounts Payable \)77,000, and Cash $30,000. Prepare the current assets section of the balance sheet, listing the accounts in proper sequence.
How does separating current assets from property, plant, and equipment in the balance sheet help analysts?
E5-12 (L03) (Preparation of a Balance Sheet) Presented below is the trial balance of Scott Butler Corporation at December 31, 2017.
Particular | Debit | Credit |
Cash | \(197,000 | |
Sales Revenue | \)8,100,000 | |
Debt investment (trading) (at cost \(145,000) | 153,000 | |
Cost of goods sold | 4,800,000 | |
Debt investment (long-term) | 299,000 | |
Equity Investment (long-term) | 277,000 | |
Notes payable (Short-term) | 90,000 | |
Account payable | 455,000 | |
Selling expenses | 2,000,000 | |
Investment revenue | 63,000 | |
Land | 260,000 | |
Buildings | 1,040,000 | |
Dividend payable | 136,000 | |
Accrued Liabilities | 96,000 | |
Accounts Receivable | 435,000 | |
Accumulated depreciation – Building | 152,000 | |
Allowance for doubtful accounts | 25,000 | |
Administrative expenses | 900,000 | |
Interest expenses | 211,000 | |
Inventory | 597,000 | |
Gain | 80,000 | |
Notes payable | 900,000 | |
Equipment | 600,000 | |
Bonds payable | 1,000,000 | |
Accumulated depreciation – Equipment | 60,000 | |
Franchises | 160,000 | |
Common stock | 1,000,000 | |
Treasury stock | 191,000 | |
Patents | 195,000 | |
Retained Earnings | 78,000 | |
Paid-in-capital in excess of par | 80,0000 | |
Total | \)12,315,000 | $12,315,000 |
Instructions Prepare a balance sheet at December 31, 2017, for Scott Butler Corporation. (Ignore income taxes.)
What do you think about this solution?
We value your feedback to improve our textbook solutions.
