Balance sheet : Balance sheet is the snapshot which shows the financial position of the business on a particular date. It provides the users of the financial statement to make effective decision. The components of balance sheet are assets, liabilities and shareholders’ equity. To Prepare: The balance sheet with given additional information and rectify its errors.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.7P

To determine

Balance sheet:

Balance sheet is the snapshot which shows the financial position of the business on a particular date. It provides the users of the financial statement to make effective decision.

The components of balance sheet are assets, liabilities and shareholders’ equity.

To Prepare: The balance sheet with given additional information and rectify its errors.

Expert Solution & Answer

Explanation of Solution

Prepare a corrected balance sheet for Corporation H at December 31, 2016 as follows:

Corporation H
Balance Sheet
December 31, 2016
Assets
Current assets:	Amount ($)	Amount ($)
Cash	60,000
Marketable securities (net) (f)	20,000
Accounts receivable	120,000
Inventories (g)	160,000
Total current assets		360,000
Investments:
Marketable securities (a)	40,000
Land held for sale (b)	50,000
Total investments		90,000
Property, plant and equipment:
Land (c)	130,000
Buildings	750,000
Machinery	280,000
Less: Accumulated depreciation	(255,000)
Net property, plant and equipment		905,000
Intangible assets:
Patent (net)		100,000
Total assets		1,455,000

Liabilities and shareholders’ Equity
Current liabilities:
Accounts payable		215,000
Current maturities of long-term debt (h)		25,000
Total current liabilities		240,000
Long-term liabilities:
Notes payable (d)		475,000
Shareholders’ equity:
Common stock	430,000
Retained earnings (e)	310,000
Total shareholders’ equity		740,000
Total liabilities and shareholders’ equity		1,455,000

Table (1)

Working notes:

1.

Calculate the amount of marketable securities of Corporation H.

Marketable securities = (Investment in securities −Sale value of marketable securities)=($60,000−$20,000)=$40,000 (a)

2.

Calculate the amount of land held for sale of Corporation H.

Land held for sales = (Market value of land −Increases in land)=($120,000−$70,000)=$50,000 (b)

3.

Calculate the amount of land of Corporation H.

Land = (Amount of land −Market value of land)=($250,000−$120,000)=$130,000

Or,

Land = (Amount of land −Land held for sale−Increase in land)=($250,000−$50,000−$70,000)=$130,000 (c)

4.

Calculate the amount of notes payable of Corporation H.

Notes payable = (Amount of notes payable −Installment payment)=($500,000−$25,000)=$475,000 (d)

5.

Calculate the amount of retained earnings of Corporation H.

Retained earnings = (Amount of retained earnings −Increased in land)=($280,000−$70,000)=$310,000 (e)

Notes:

The amount of marketable equity securities is $20,000 is to be sold in the coming year is shown in the current asset side of the balance sheet. (f)
The original cost of inventories is $160,000 is shown in the current asset side of the balance sheet. (g)
Notes payable is a long-term liability and the note is payable in installment of amount $25,000 which is classified under current maturities of long-term debt. (h)

Conclusion

Therefore, total assets as well as total liabilities and shareholder’s equity of Corporation H as on December 31, 2016 is $1,455,000.

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PART B The Palmer School of Business operates a transportation service, solely for the purpose of providing commuting services to off-campus students. You have been hired as accounting students to analyze the cost of providing the transportation services and to develop a cost function which describes the behaviour of the related costs. The schools' administration has assembled the data for a twelve-month period pertaining to the monthly total costs of providing the service and the corresponding number of students who used the transportation system each month. You were recently taught how to use the Excel graphing tool, and a member of the team successfully generated the scattergram given below from the data set provided. Total Transportation Costs PALMER SCHOOL OF BUSINESS SCATTER DIAGRAM 300,000 Line of Best Fit 250,000 200,000 150,000 100,000 50,000 0 500 1,000 1,500 # of Students 2,000 2,500 3,000 The other team members are now tasked to use the graph to provide the administrators…

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.7P

To determine

Balance sheet:

Balance sheet is the snapshot which shows the financial position of the business on a particular date. It provides the users of the financial statement to make effective decision.

The components of balance sheet are assets, liabilities and shareholders’ equity.

To Prepare: The balance sheet with given additional information and rectify its errors.

Expert Solution & Answer

Explanation of Solution

Prepare a corrected balance sheet for Corporation H at December 31, 2016 as follows:

Corporation H
Balance Sheet
December 31, 2016
Assets
Current assets:	Amount ($)	Amount ($)
Cash	60,000
Marketable securities (net) (f)	20,000
Accounts receivable	120,000
Inventories (g)	160,000
Total current assets		360,000
Investments:
Marketable securities (a)	40,000
Land held for sale (b)	50,000
Total investments		90,000
Property, plant and equipment:
Land (c)	130,000
Buildings	750,000
Machinery	280,000
Less: Accumulated depreciation	(255,000)
Net property, plant and equipment		905,000
Intangible assets:
Patent (net)		100,000
Total assets		1,455,000

Liabilities and shareholders’ Equity
Current liabilities:
Accounts payable		215,000
Current maturities of long-term debt (h)		25,000
Total current liabilities		240,000
Long-term liabilities:
Notes payable (d)		475,000
Shareholders’ equity:
Common stock	430,000
Retained earnings (e)	310,000
Total shareholders’ equity		740,000
Total liabilities and shareholders’ equity		1,455,000

Table (1)

Working notes:

1.

Calculate the amount of marketable securities of Corporation H.

Marketable securities = (Investment in securities −Sale value of marketable securities)=($60,000−$20,000)=$40,000 (a)

2.

Calculate the amount of land held for sale of Corporation H.

Land held for sales = (Market value of land −Increases in land)=($120,000−$70,000)=$50,000 (b)

3.

Calculate the amount of land of Corporation H.

Land = (Amount of land −Market value of land)=($250,000−$120,000)=$130,000

Or,

Land = (Amount of land −Land held for sale−Increase in land)=($250,000−$50,000−$70,000)=$130,000 (c)

4.

Calculate the amount of notes payable of Corporation H.

Notes payable = (Amount of notes payable −Installment payment)=($500,000−$25,000)=$475,000 (d)

5.

Calculate the amount of retained earnings of Corporation H.

Retained earnings = (Amount of retained earnings −Increased in land)=($280,000−$70,000)=$310,000 (e)

Notes:

The amount of marketable equity securities is $20,000 is to be sold in the coming year is shown in the current asset side of the balance sheet. (f)
The original cost of inventories is $160,000 is shown in the current asset side of the balance sheet. (g)
Notes payable is a long-term liability and the note is payable in installment of amount $25,000 which is classified under current maturities of long-term debt. (h)

Conclusion

Therefore, total assets as well as total liabilities and shareholder’s equity of Corporation H as on December 31, 2016 is $1,455,000.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.7P

To determine

Balance sheet:

Balance sheet is the snapshot which shows the financial position of the business on a particular date. It provides the users of the financial statement to make effective decision.

The components of balance sheet are assets, liabilities and shareholders’ equity.

To Prepare: The balance sheet with given additional information and rectify its errors.

Expert Solution & Answer

Explanation of Solution

Prepare a corrected balance sheet for Corporation H at December 31, 2016 as follows:

Corporation H
Balance Sheet
December 31, 2016
Assets
Current assets:	Amount ($)	Amount ($)
Cash	60,000
Marketable securities (net) (f)	20,000
Accounts receivable	120,000
Inventories (g)	160,000
Total current assets		360,000
Investments:
Marketable securities (a)	40,000
Land held for sale (b)	50,000
Total investments		90,000
Property, plant and equipment:
Land (c)	130,000
Buildings	750,000
Machinery	280,000
Less: Accumulated depreciation	(255,000)
Net property, plant and equipment		905,000
Intangible assets:
Patent (net)		100,000
Total assets		1,455,000

Liabilities and shareholders’ Equity
Current liabilities:
Accounts payable		215,000
Current maturities of long-term debt (h)		25,000
Total current liabilities		240,000
Long-term liabilities:
Notes payable (d)		475,000
Shareholders’ equity:
Common stock	430,000
Retained earnings (e)	310,000
Total shareholders’ equity		740,000
Total liabilities and shareholders’ equity		1,455,000

Table (1)

Working notes:

1.

Calculate the amount of marketable securities of Corporation H.

Marketable securities = (Investment in securities −Sale value of marketable securities)=($60,000−$20,000)=$40,000 (a)

2.

Calculate the amount of land held for sale of Corporation H.

Land held for sales = (Market value of land −Increases in land)=($120,000−$70,000)=$50,000 (b)

3.

Calculate the amount of land of Corporation H.

Land = (Amount of land −Market value of land)=($250,000−$120,000)=$130,000

Or,

Land = (Amount of land −Land held for sale−Increase in land)=($250,000−$50,000−$70,000)=$130,000 (c)

4.

Calculate the amount of notes payable of Corporation H.

Notes payable = (Amount of notes payable −Installment payment)=($500,000−$25,000)=$475,000 (d)

5.

Calculate the amount of retained earnings of Corporation H.

Retained earnings = (Amount of retained earnings −Increased in land)=($280,000−$70,000)=$310,000 (e)

Notes:

The amount of marketable equity securities is $20,000 is to be sold in the coming year is shown in the current asset side of the balance sheet. (f)
The original cost of inventories is $160,000 is shown in the current asset side of the balance sheet. (g)
Notes payable is a long-term liability and the note is payable in installment of amount $25,000 which is classified under current maturities of long-term debt. (h)

Conclusion

Therefore, total assets as well as total liabilities and shareholder’s equity of Corporation H as on December 31, 2016 is $1,455,000.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 3, Problem 3.7P

To determine

Balance sheet:

Balance sheet is the snapshot which shows the financial position of the business on a particular date. It provides the users of the financial statement to make effective decision.

The components of balance sheet are assets, liabilities and shareholders’ equity.

To Prepare: The balance sheet with given additional information and rectify its errors.

Expert Solution & Answer

Explanation of Solution

Prepare a corrected balance sheet for Corporation H at December 31, 2016 as follows:

Corporation H
Balance Sheet
December 31, 2016
Assets
Current assets:	Amount ($)	Amount ($)
Cash	60,000
Marketable securities (net) (f)	20,000
Accounts receivable	120,000
Inventories (g)	160,000
Total current assets		360,000
Investments:
Marketable securities (a)	40,000
Land held for sale (b)	50,000
Total investments		90,000
Property, plant and equipment:
Land (c)	130,000
Buildings	750,000
Machinery	280,000
Less: Accumulated depreciation	(255,000)
Net property, plant and equipment		905,000
Intangible assets:
Patent (net)		100,000
Total assets		1,455,000

Liabilities and shareholders’ Equity
Current liabilities:
Accounts payable		215,000
Current maturities of long-term debt (h)		25,000
Total current liabilities		240,000
Long-term liabilities:
Notes payable (d)		475,000
Shareholders’ equity:
Common stock	430,000
Retained earnings (e)	310,000
Total shareholders’ equity		740,000
Total liabilities and shareholders’ equity		1,455,000

Table (1)

Working notes:

1.

Calculate the amount of marketable securities of Corporation H.

Marketable securities = (Investment in securities −Sale value of marketable securities)=($60,000−$20,000)=$40,000 (a)

2.

Calculate the amount of land held for sale of Corporation H.

Land held for sales = (Market value of land −Increases in land)=($120,000−$70,000)=$50,000 (b)

3.

Calculate the amount of land of Corporation H.

Land = (Amount of land −Market value of land)=($250,000−$120,000)=$130,000

Or,

Land = (Amount of land −Land held for sale−Increase in land)=($250,000−$50,000−$70,000)=$130,000 (c)

4.

Calculate the amount of notes payable of Corporation H.

Notes payable = (Amount of notes payable −Installment payment)=($500,000−$25,000)=$475,000 (d)

5.

Calculate the amount of retained earnings of Corporation H.

Retained earnings = (Amount of retained earnings −Increased in land)=($280,000−$70,000)=$310,000 (e)

Notes:

The amount of marketable equity securities is $20,000 is to be sold in the coming year is shown in the current asset side of the balance sheet. (f)
The original cost of inventories is $160,000 is shown in the current asset side of the balance sheet. (g)
Notes payable is a long-term liability and the note is payable in installment of amount $25,000 which is classified under current maturities of long-term debt. (h)

Conclusion

Therefore, total assets as well as total liabilities and shareholder’s equity of Corporation H as on December 31, 2016 is $1,455,000.

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Answer 5

Chapter 3, Problem 3.7P

To determine

Balance sheet:

Balance sheet is the snapshot which shows the financial position of the business on a particular date. It provides the users of the financial statement to make effective decision.

The components of balance sheet are assets, liabilities and shareholders’ equity.

To Prepare: The balance sheet with given additional information and rectify its errors.

Expert Solution & Answer

Explanation of Solution

Prepare a corrected balance sheet for Corporation H at December 31, 2016 as follows:

Corporation H
Balance Sheet
December 31, 2016
Assets
Current assets:	Amount ($)	Amount ($)
Cash	60,000
Marketable securities (net) (f)	20,000
Accounts receivable	120,000
Inventories (g)	160,000
Total current assets		360,000
Investments:
Marketable securities (a)	40,000
Land held for sale (b)	50,000
Total investments		90,000
Property, plant and equipment:
Land (c)	130,000
Buildings	750,000
Machinery	280,000
Less: Accumulated depreciation	(255,000)
Net property, plant and equipment		905,000
Intangible assets:
Patent (net)		100,000
Total assets		1,455,000

Liabilities and shareholders’ Equity
Current liabilities:
Accounts payable		215,000
Current maturities of long-term debt (h)		25,000
Total current liabilities		240,000
Long-term liabilities:
Notes payable (d)		475,000
Shareholders’ equity:
Common stock	430,000
Retained earnings (e)	310,000
Total shareholders’ equity		740,000
Total liabilities and shareholders’ equity		1,455,000

Table (1)

Working notes:

1.

Calculate the amount of marketable securities of Corporation H.

Marketable securities = (Investment in securities −Sale value of marketable securities)=($60,000−$20,000)=$40,000 (a)

2.

Calculate the amount of land held for sale of Corporation H.

Land held for sales = (Market value of land −Increases in land)=($120,000−$70,000)=$50,000 (b)

3.

Calculate the amount of land of Corporation H.

Land = (Amount of land −Market value of land)=($250,000−$120,000)=$130,000

Or,

Land = (Amount of land −Land held for sale−Increase in land)=($250,000−$50,000−$70,000)=$130,000 (c)

4.

Calculate the amount of notes payable of Corporation H.

Notes payable = (Amount of notes payable −Installment payment)=($500,000−$25,000)=$475,000 (d)

5.

Calculate the amount of retained earnings of Corporation H.

Retained earnings = (Amount of retained earnings −Increased in land)=($280,000−$70,000)=$310,000 (e)

Notes:

The amount of marketable equity securities is $20,000 is to be sold in the coming year is shown in the current asset side of the balance sheet. (f)
The original cost of inventories is $160,000 is shown in the current asset side of the balance sheet. (g)
Notes payable is a long-term liability and the note is payable in installment of amount $25,000 which is classified under current maturities of long-term debt. (h)

Conclusion

Therefore, total assets as well as total liabilities and shareholder’s equity of Corporation H as on December 31, 2016 is $1,455,000.

Answer 6

Chapter 3, Problem 3.7P

To determine

Balance sheet:

Balance sheet is the snapshot which shows the financial position of the business on a particular date. It provides the users of the financial statement to make effective decision.

The components of balance sheet are assets, liabilities and shareholders’ equity.

To Prepare: The balance sheet with given additional information and rectify its errors.

Expert Solution & Answer

Explanation of Solution

Prepare a corrected balance sheet for Corporation H at December 31, 2016 as follows:

Corporation H
Balance Sheet
December 31, 2016
Assets
Current assets:	Amount ($)	Amount ($)
Cash	60,000
Marketable securities (net) (f)	20,000
Accounts receivable	120,000
Inventories (g)	160,000
Total current assets		360,000
Investments:
Marketable securities (a)	40,000
Land held for sale (b)	50,000
Total investments		90,000
Property, plant and equipment:
Land (c)	130,000
Buildings	750,000
Machinery	280,000
Less: Accumulated depreciation	(255,000)
Net property, plant and equipment		905,000
Intangible assets:
Patent (net)		100,000
Total assets		1,455,000

Liabilities and shareholders’ Equity
Current liabilities:
Accounts payable		215,000
Current maturities of long-term debt (h)		25,000
Total current liabilities		240,000
Long-term liabilities:
Notes payable (d)		475,000
Shareholders’ equity:
Common stock	430,000
Retained earnings (e)	310,000
Total shareholders’ equity		740,000
Total liabilities and shareholders’ equity		1,455,000

Table (1)

Working notes:

1.

Calculate the amount of marketable securities of Corporation H.

Marketable securities = (Investment in securities −Sale value of marketable securities)=($60,000−$20,000)=$40,000 (a)

2.

Calculate the amount of land held for sale of Corporation H.

Land held for sales = (Market value of land −Increases in land)=($120,000−$70,000)=$50,000 (b)

3.

Calculate the amount of land of Corporation H.

Land = (Amount of land −Market value of land)=($250,000−$120,000)=$130,000

Or,

Land = (Amount of land −Land held for sale−Increase in land)=($250,000−$50,000−$70,000)=$130,000 (c)

4.

Calculate the amount of notes payable of Corporation H.

Notes payable = (Amount of notes payable −Installment payment)=($500,000−$25,000)=$475,000 (d)

5.

Calculate the amount of retained earnings of Corporation H.

Retained earnings = (Amount of retained earnings −Increased in land)=($280,000−$70,000)=$310,000 (e)

Notes:

The amount of marketable equity securities is $20,000 is to be sold in the coming year is shown in the current asset side of the balance sheet. (f)
The original cost of inventories is $160,000 is shown in the current asset side of the balance sheet. (g)
Notes payable is a long-term liability and the note is payable in installment of amount $25,000 which is classified under current maturities of long-term debt. (h)

Conclusion

Therefore, total assets as well as total liabilities and shareholder’s equity of Corporation H as on December 31, 2016 is $1,455,000.

Answer 7

Chapter 3, Problem 3.7P

To determine

Balance sheet:

Balance sheet is the snapshot which shows the financial position of the business on a particular date. It provides the users of the financial statement to make effective decision.

The components of balance sheet are assets, liabilities and shareholders’ equity.

To Prepare: The balance sheet with given additional information and rectify its errors.

Answer 8

Expert Solution & Answer

Explanation of Solution

Prepare a corrected balance sheet for Corporation H at December 31, 2016 as follows:

Corporation H
Balance Sheet
December 31, 2016
Assets
Current assets:	Amount ($)	Amount ($)
Cash	60,000
Marketable securities (net) (f)	20,000
Accounts receivable	120,000
Inventories (g)	160,000
Total current assets		360,000
Investments:
Marketable securities (a)	40,000
Land held for sale (b)	50,000
Total investments		90,000
Property, plant and equipment:
Land (c)	130,000
Buildings	750,000
Machinery	280,000
Less: Accumulated depreciation	(255,000)
Net property, plant and equipment		905,000
Intangible assets:
Patent (net)		100,000
Total assets		1,455,000

Liabilities and shareholders’ Equity
Current liabilities:
Accounts payable		215,000
Current maturities of long-term debt (h)		25,000
Total current liabilities		240,000
Long-term liabilities:
Notes payable (d)		475,000
Shareholders’ equity:
Common stock	430,000
Retained earnings (e)	310,000
Total shareholders’ equity		740,000
Total liabilities and shareholders’ equity		1,455,000

Table (1)

Working notes:

1.

Calculate the amount of marketable securities of Corporation H.

Marketable securities = (Investment in securities −Sale value of marketable securities)=($60,000−$20,000)=$40,000 (a)

2.

Calculate the amount of land held for sale of Corporation H.

Land held for sales = (Market value of land −Increases in land)=($120,000−$70,000)=$50,000 (b)

3.

Calculate the amount of land of Corporation H.

Land = (Amount of land −Market value of land)=($250,000−$120,000)=$130,000

Or,

Land = (Amount of land −Land held for sale−Increase in land)=($250,000−$50,000−$70,000)=$130,000 (c)

4.

Calculate the amount of notes payable of Corporation H.

Notes payable = (Amount of notes payable −Installment payment)=($500,000−$25,000)=$475,000 (d)

5.

Calculate the amount of retained earnings of Corporation H.

Retained earnings = (Amount of retained earnings −Increased in land)=($280,000−$70,000)=$310,000 (e)

Notes:

The amount of marketable equity securities is $20,000 is to be sold in the coming year is shown in the current asset side of the balance sheet. (f)
The original cost of inventories is $160,000 is shown in the current asset side of the balance sheet. (g)
Notes payable is a long-term liability and the note is payable in installment of amount $25,000 which is classified under current maturities of long-term debt. (h)