- Cash on hand December 31 was $1,790; on deposit $162,875.
- Customers’ acceptances unmatured $449,500.
- The market value of the Liberty bonds was $46,000,
- and general investments $50,000.
- Loans receivable $16,000.
- Income accrued on investments $1,800.
- Accounts receivable $2,310,000.
- Reserve for doubtful accounts $60,000.
- Notes receivable $150,000.
- Prepaid rent $2,400.
- During the year $380,000 worth of goods was added to
- finished stock, and $420,000 at cost price was sold.
- It is decided that the balance must be marked down
- 50% to conform to market replacement costs.
- Goods now in process are valued at $315,890.
- Raw materials carried on the books at $670,000 are to be
- written down 30% to market value.
- 5% of the cost of plant and equipment is to be added to
- the reserve for depreciation.
- Accounts payable $3,670,980.
- Notes payable $1,475,000.
- A dividend of 5% had been declared and was payable
- January 15 of the next year.
4. By comparing the two December 31 balance sheets of the Cordovan Tanning Company, what can you tell as to the progress of the company during the year? Did it make a profit or suffer a loss?
IV
1. Draw up a comparative balance sheet as of December 31, 19— of the Interurban Railway Company, from the balance sheets of December 31, 19— and December 31 of the previous year.
- Balance sheet of 19— showed:
- Cash $40,909.18.
- Accounts receivable $33,097.49.
- Securities deposited with Workmen’s Compensation
- Commission $4,893.75.
- Materials and supplies $27,112.28.
- Prepaid insurance $5,732.16.
- Work in progress $7,509.81.
- Road and equipment $696,622.49.
- Accounts payable $17,058.81.
- Notes payable $70,000.
- Accrued interest on first mortgage bonds $3,645.84.
- Accrued taxes $6,450.65.
- Depreciation reserve for road and equipment $19,995.96.
- Surplus $223,725.90.
- Capital stock $300,000.
- First mortgage 5% bonds $175,000.
- Balance sheet of the year previous showed:
- Cash $34,313.78.
- Accounts receivable $57,779.47.
- Securities deposited with Workmen’s Compensation Commission $4,893.75.
- Materials and supplies $29,308.56.
- Insurance prepaid $3,639.19.
- Work in progress $98.64.
- Road and equipment $694,216.73.
- Depreciation reserve for road and equipment $15,813.46.
- Capital stock $300,000.
- Accounts payable $25,973.61.
- Notes payable $100,000.
- Accrued interest on bonds $3,645.84.
- Accrued taxes $8,872.31.
- First mortgage bonds $175,000.
- Surplus $194,944.90.
2. Can you tell definitely and in detail how the increase in surplus in Problem 1 was effected?
3. The annual report of the Northeastern Power Company for year ending December 31, 19—, gave the following balance sheet as of December 31, 19—:
- Investments in subsidiary companies $4,244,855.57.
- Cash $1,927,898.84.
- Accounts receivable $1,514,605.11.
- U. S. Government Liberty Loan 4¼% bonds $915,102.
- Canadian Victory Loan 5½% bonds $497,769.88.
- Securities deposited with State Workmen’s Compensation Commission $8,893.75
- Other securities $241,001.
- Mortgages owned $13,500.
- Materials and supplies $364,410.81.
- Work in progress $12,931.10.
- Prepaid insurance $231,350.66.
- Prepaid taxes $624,744.28.
- Real estate, plant and transmission systems $48,230,896.04.
- Mortgage on real estate $15,000.
- Accounts payable $867,763.35.
- Accrued taxes $707,870.94.
- Interest payable $213,896.68.
- Dividends payable $201,519.50.
- First mortgage 5% bonds $10,000,000.
- 6% refunding mortgage bonds $8,226,000.
- 6% debentures $10,200,000.
- Depreciation reserve $2,254,476.13.
- Surplus $138,932.44.
- Capital stock outstanding $26,002,500.
The report for the following year gives the following particulars as to the balance sheet of that year:
- Cash $1,677,663.43.
- Accounts receivable $1,286,731.23.
- U. S. Liberty bonds 4¼% $1,106,452.
- Canadian Victory Loan 5½% bonds $747,769.88.
- Securities deposited with State Workmen’s Compensation Commission $8,893.75.
- Other securities $170,501.
- Mortgages owned $15,500.
- Materials and supplies $391,645.
- Prepaid insurance $355,302.71.
- Investments in subsidiary companies $1,406,325.67.
- Prepaid taxes $607,575.33.
- Real estate, plant, and transmission systems $53,470,089.04.
- There were no changes in the various bond issues nor in the
- capital stock during the year.
- Mortgages on real estate $20,000.
- Accounts payable $875,214.37.
- Notes payable $1,650,000.
- Accrued taxes $484,806.02.
- Interest payable $215,509.58.
- Dividends payable $201,519.50.
- Reserves for depreciation $2,532,715.94.