Problem 5-3 (P5-3) (Balance Sheet Adjustment and Preparation) The
adjusted trial balance of Side Kicks Company and other related
information for the year 2007 are presented on the next page.
AND SO ON
Additional information:
1. The LIFO method of inventory value is used.
2. The cost and fair value of the long-term investments that consist of stocks and bonds is the same.
3. The amount of the Construction Work in Progress account represents
the costs expended to date on a building in the process of construction.
(The company rents factory space at the present time.) The land on
which the building is being constructed cost $85,000, as shown in the
trial balance.
4. The patents were purchased by the company at a cost of $40,000 and are being amortized on a straight-line basis.
5. Of the unamortized discount on bonds payable, $2,000 will be amortized in 2008.
6. The notes payable represent bank loans that are secured by long-term
investments carried at $120,000. These bank loans are due in 2008.
7. The bonds payable bear interest at 8% payable every December 31, and are due January 1, 2018.
8. 600,000 shares of common stock of a par value of $1 were authorized, of which 500,000 shares were issued and outstanding.
Instructions
Prepare a balance sheet as of December 31, 2007, so that all important information is fully disclosed.
Click here for the solution: (Balance Sheet Adjustment and Preparation) The adjusted trial balance of Side Kicks Company and other related information for the year 2007 are presented on the next page
