E5-7 (current assets section of the balance sheet) presented below

E5-7 (Current Assets Section of the Balance Sheet) Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2014.

Finished Goods

$52,000

Cost of Goods Sold

$2,100,000

Unearned Revenue

90,000

Notes Receivable

40,000

Equipment

253,000

Accounts Receivable

161,000

Work in Process

34,000

Raw Materials

207,000

Cash

37,000

Supplies Expense

60,000

Equity Investments (Short-term)

31,000

Allowance for Doubtful Accounts

12,000

Customer Advances

36,000

Licenses

18,000

Cash Restricted 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 receivables are due April 30, 2016, with interest receivable every April 30. The notes bear interest at 6%(Hint: Accrue interest due on December 31, 2014.)

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 amortization of $14,000

7. Treasury stock is recorded at cost.

 

 

Instructions

Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2014, balance sheet, with appropriate disclosures.

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