2. From the following particulars prepare a balance sheet of the Mountel Manufacturing Company as of December 31, 19—:
- Premises $2,500.
- Machinery $11,500.
- Buildings $5,300.
- Capital stock $30,000.
- Stock-in-trade: finished goods $12,500;
- goods in process of manufacture $8,670;
- and raw materials $4,980.
- Loose tools $490.
- Models and patterns $650.
- Patents $1,000.
- Good-will $3,000.
- Trade creditors $15,540.
- Cash $50.
- Motor truck $1,580.
- Bank deposits $1,740.
- Outstanding claims against customers on open account $8,975.
- A 60-day note payable for $1,000 had been discounted
- at the bank at 6% and is due in 30 days.
- Office equipment $250.
- Supplies $500.
- Notes receivable $4,970.
- First National Bank stock and other investments $4,000.
- Unexpired insurance premium $150.
- Accrued wages $75.
- Other notes payable outstanding amount to $8,960.
- Purchase money mortgage on machinery $5,500, due in 18 months.
- Mortgage on buildings $2,000, due in six months.
- Unpaid motor truck expense $85.
It is estimated that during the year machinery has depreciated 10% and buildings 5% from the values shown above.
Investigation shows that the present market value of finished goods is 75% of that carried on the books, goods in process 90%, and raw materials 100%.
It is decided to reduce the values of stock-in-trade to present price levels.
A reserve of 5% is to be created for bad debts, 50% for models and patterns, and 20% for the delivery truck.
Loose tools are valued at $245.
3. The Cordovan Tanning Company has issued $3,000,000 of capital stock. It suffered heavy losses due to the drop in prices during the year. The following balance sheet submitted to the stockholders as of December 31, 19—, showed:
- Cash on hand $1,805; on deposit $378,090.
- Customers’ acceptances unmatured $249,754.
- U. S. Liberty bonds $47,500.
- General investments $82,950.
- Loans receivable $15,280.
- Income accrued on investments $3,450.
- Accounts receivable $2,948,582.
- Reserve for doubtful accounts $56,125.
- Notes receivable $82,000.
- Prepaid insurance $14,950.
- Finished goods $750,000.
- Goods in process $697,974.
- Raw materials $460,900.
- Plant and equipment, $4,980,760.
- Depreciation reserve for plant and equipment was $460,640.
- Accounts payable $1,980,760.
- Notes payable $350,000.
- Dividends payable January 15 of the next year, and constituting
- a present liability of the company $230,000.
From the following information and the balance sheet as of December 31, 19—, prepare the balance sheet as of December 31 one year later.