(TCO D) The following balance sheet was prepared by the bookkeeper for King Company as of December 31, 201X. King

Company Balance Sheet as of December 31, 201X is as follows. Cash

$ 80,000

Accounts payable

$ 75,000

Accounts receivable (net)

52,200

Long-term liabilities

100,000

Inventories

57,000

Stockholders’ equity

218,500

Investments

76,300

Equipment (net)

96,000

Patents

32,000

$393,500

$393,500

The following additional information is provided.

(1) Cash includes the cash surrender value of a life insurance policy $9,400 and a bank overdraft of $2,500 has been deducted.

(2) The net accounts receivable balance includes

(a) accounts receivable debit balances $60,000;

(b) accounts receivable credit balances $4,000; and

(c) allowance for doubtful accounts $3,800.

(3) Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.

(4) Investments include investments in common stock, trading $24,000, available-for-sale $48,300, and franchises $4,000.

(5) Equipment costing $5,000 with accumulated depreciation $4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.

Instructions:

Prepare a balance sheet in good form (stockholders’ equity details can be omitted). (Points : 40)

 

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