Question

P12-6A. The following data, presented in alphabetical order, are taken from the records of Nieto Corporation.

Accounts Payable $260,000

Accounts Receivable $140,000

Accumulated depreciation- buildings $180,000

Accumulated deprecation-equipment $52,000

Allowance for doubtful accounts $6,000

Bonds payable (10% due 2023) $500,000

Building $950,000

Cash $62,000

Common Stock

($10 par value; 500,000 shares authorized, 150,00 shares issued) $1,500,000

Dividends payable $80,000

Equipment $275,000

Fair Value Adjustment-available –for-sale securities (Dr) $8,000

Goodwill $200,000

Income taxes payable $120,000

Inventory $170,000

Investment in Mara common stock (30% ownership) at equity $380,000

Investment in Sasse common stock (10% ownership), at cost $278,000

Land $390,000

Notes Payable (due 2016) $70,000

Paid –in Capital in excess of par- common stock $130,000

Premium on bonds payable $40,000

Prepaid insurance $16,000

Retained earnings $103,000

Short-term investments, at fair value (and cost) $180,000

Unrealized gain—available-for-sale-securities $8,000

The investment in Sasse common stock is considered to be a long-term available-for-sale security.

Instructions

Prepare a classi?ed balance sheet at December 31, 2015.

Answer 1

Answer and Explanation:

                                     Nieto Corporation

                                        Balance Sheet

                                      December 31, 2015

Current Assets:

Cash                                                                 $62,000

Account Receivable    $140,000

Less: Allowance for

doubtful accounts         $6,000                       $134,000

Prepaid Insurance                                               16,000

Short-term investments                                     180,000

Inventory                                                            170,000

Total Current Assets                                                                    $562,000

Fixed Assets

Equipment                         275,000

Less: Acc. Dep.                  52,000                     223,000

Building                              950,000

Less: Dep.                          180,000                    770,000

Land                                                                     390,000

Investments

(Mara + Sasse)                                                      658,000      

Goodwill                                                               200,000         $2,241,000

Total Assets                                                                                $2,803,000                        

Current Liabilities

Accounts payable                                            $260,000  

Income taxes payable                                         120,000    

Dividend payable                                            $80,000  

Notes payable                                                  70,000  

Premium on bonds payable                                   40,000  

Total Current liabilities                                                                   $570,000

Long-term liabilities

Bonds payable                                       $500,000          500,000

Total liabilities                                                            $1,070,000

Equity

Capital stock                                               $1,500,000  

Paid-in capital in

excess of par common stock                        130,000  

Retained earnings                                          $103,000         1,733,000

Total liability and stockholders' equity                        $2,803,000