Question

the following is the ending balances of accounts at december 31, 2021 for the cosburgh electronics corporation.

Cash $ 67,000 Short-term investments 182,000 Accounts receivable 123,000 Long-term investments 35,000 215,000 Inventory Receivables from employees 40,000 Prepaid expenses (for 2022) 16,000 Land 280,000 Building 1,550,000 Equipment 637,000 152,000 Patent (net) Franchise (net) 40,000 Notes receivable 250,000 Interest receivable 12,000 $ 620,000 210,000 189,000 10,000 Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts 16,000 40,000 60,000 300,000 8,000 Common stock 2,000,000 Retained earnings 146,000 Totals $3,599,000 $3,599,000

additional information

1. the common stock represents 1 million shares of no par stock authorized, 500,000 shares issues and outstanding

2. the receivables from employees are due on June 30 2022

3. the notes receivables are due in installments of %50,000, payable on each September 30. interest is payable annually.

4. short term investments consist of securities that the company plans to sell in 2022 and %50,000 in treasaury bills purchased on December 15 of the current year that mature on February 15, 2022. Long term investments consist of securities that the company does not plan to sell in the enxt year.

5. deferred revenue represents payments from customer for extended service contracts. eighty percent of these contracts expire in 2022, the remainder in 2023.

6. notes payable consists of two notes, one for $100m000 due on January 15, 2023, and another for $200,000 due on June 30, 2024

Required:

1. prepare a classified balance sheet for vosburgh at December 31, 2021. include headings for each classification, as well as titles for each classification's subtotal.

2. indentify the items that would require additional disclosure, either on the face of the balance sheet or in a disclosure note.

Answer 1

Ans:

Classified balance sheet for vosburgh at December 31, 2021

ASSETS	Amount	Amount
Current Assets
Cash	$67,000
Marketable securities (Short term)	$132,000
Accounts receivable (net) ($123000-$8000)	$115000
Treasury Bills	$50000
Receivables from employees	$40000
Interest receivable	$12000
Note receivable—current portion ($250000-$200000)	$50000
Inventories	$215000
Prepaid expenses	$16000
Total current assets		$697000
Non Current assets
Marketable securities	$35000
Note receivable (250000-50000)	$200000
Franchise	$40000
Patents	$152000
Land	$280000
Machinery and Equipment $637000
Less: Accumulated Depreciation ($210000)	$427000
Buildings $1550000
Less: Accumulated Depreciation ($620000)	$930000
Total Non Current Assets		$2064000
(A)Total Assets		$2761000
Current Liabilities
Accounts Payable	$189,000
Taxes Payable	$40,000
Deferred Revenue	$48,000
Interest Payable	$16,000
Dividends Payable	$10,000
Total Current Liabilities		$303000
Non Current Liabilities
Deferred Revenue	$12,000
Notes Payable	$300,000
Total Non Current Liabilities		$312000
(B)Total Liabilities		$615000
Equity
Common Stock	$2,000,000
Retained Earnings	$146,000
(C)Total Equity		$2146000
Total Equity + Liabilities (B + C)		$2761000

• Account of Current Assets , the criteria is to have a liquidity speed less than one year

Cash

Marketable Securities

Treasury Bills

Accounts Receivable

Inventory

Prepaid Expenses

Note Receivable

Interest Receivable

Loans to Employees

• Account of Non Current Assets , the criteria is to have a liquidity speed more than one year and are known as fixed assets

Land

Machinery and Equipment

Accum Depreciation

Buildings

Accum Depreciation

Patents

Franchise

Note Receivable

Marketable Securities Long Term

• Account of Current Liabilities , the criteria is to have a liquidity speed less of one year

Accounts Payable

Taxes Payable

Deferred Revenue

Interest Payable

Dividends Payable

• Account of Non Current Liabilities, the criteria is to have a liquidity speed more than one year and are known as long term financing

Deferred Revenue

Notes Payable

• Account of Total Equity

Common Stock

Retained Earnings

• Liquidity is defined as the speed of the assets that will be converted into cash, assets that take less days to buy or sell are more liquid than others. Cash is the most liquid asset, than Accounts Receivable and Inventories. Assets such as capital investments, prepaid expenses are not liquid because comapny cannot get cash unless it has the right for it.