Question

Miscellaneous Accruals-Other accruals not separately classified amount to $75,000 as of March 31, 2015. Dividends-On March 15, 2015, Balzac's board of directors declared a cash dividend of $.40 per common share and a 10% common stock dividend. Both dividends were to be distributed on April 12, 2015, to the common stockholders of record at the close of business on March 31, 2015. Data regarding Balzac common stock are as follows: 4. 5. Par Value Number of shares issued and outstanding $5 per share 3,000,000 shares Market values of common stock March 15, 2015 March 31, 2015 April 12, 2015 $22.00 per share 21.50 per share 22.50 per share Instructions: Prepare the liabilities section of the balance sheet and appropriate notes to the statement for Balzac Inc as of March 31, 2015, as they should appear in its annual report to the stockholders. Write the entries which would be made over the life of the bonds and the dividend declarations. Include an analysis of the notes payable and warranty account.

Answer 1

IN CASE OF ANY DOUBTS FEEL OR CORRECTIONS FEEL FREE TO COMMENT BELOW

Balance Sheet of Balzac Inc as on 31st MArch 2015

Non Current Liability
Bond payable			4905000
Note payable			2700000
Current Liability
Note payable			800000
Interest payable on notes			210000
Trade payable			370000
Accured Warranty liability			115000
(210000-95000)
Payroll liability			202000
Government dues			617000
Miscellanous liab			75000
Dividend
Common share			1200000
Common stock			6600000
Interest on Bond payable			137500

Notes To Accounts

1. Dividend Entry

Dividend A/c Dr 7800000

to Dividend payable 7800000

2. Note payable

Non current Liability Payable after 1year 2700000

Current Liability payable in !year 800000

3. Warranty

Last Year Warranty Liability return off in current year 84000

Accured Warranty A/c Dr 84000

To Cash 84000

Current Year Warranty Due

1. warranty expense A/c Dr 210000

To accured warranty 210000

2. Accured WarrantyA/c Dr 95000

To Cash 95000

4..Bond

Entry

July Interest Expense A/c Dr 285000

To Discount on Bond 10000

To Interest Payable 275000

Jan Interest Expense A/c Dr 285000

To Discount on Bond 10000

To Interest Payable 275000

Amortization Table

Month	Year	Cash	Interest	Discount	Carry Value
July	2009			200000
Jan	2010	275000	285000	190000	4810000
July	2010	275000	285000	180000	4820000
jan	2011	275000	285000	170000	4830000
July	2011	275000	285000	160000	4840000
Jan	2012	275000	285000	150000	4850000
July	2012	275000	285000	140000	4860000
Jan	2013	275000	285000	130000	4870000
July	2013	275000	285000	120000	4880000
Jan	2014	275000	285000	110000	4890000
July	2014	275000	285000	100000	4900000
Jan	2015	275000	285000	90000	4910000
July	2015	275000	285000	80000	4920000
Jan	2016	275000	285000	70000	4930000
July	2016	275000	285000	60000	4940000
Jan	2017	275000	285000	50000	4950000
July	2017	275000	285000	40000	4960000
Jan	2018	275000	285000	30000	4970000
July	2018	275000	285000	20000	4980000
Jan	2019	275000	285000	10000	4990000
July	2019	275000	285000	0	5000000