ACC 421 Week 4 Individual Assignment P1,P2,P3 And P4 Solution
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Problem 1:
Grading: This problem is worth a total of 18.75 points. There are 22grading elements each worth 18.75 x 2/3 / 22= 0.5682 points. There are 18.75 x 1/3 = 6.25 points available for effort.
The FJF Company does not employ a full-time accountant. However they do employ a bookkeeper that records entries and attempts to prepare drafts of financial statements. You have been retained by the company to review the bookkeeper’s work and prepare correct financial statements for 2014. You have completed your review of the bookkeeper’s work and, based upon your review, the bookkeeper has prepared the following draft balance sheet for your review.
FJF Company
Balance sheet
For the year ended December 31, 2014
Stockholders’ s equity
Common stock, $9 par, authorized 70,000
shares, Issued 48,000 shares $432,000
Additional paid-in capital 237,000
Retained earnings
Intangible assets
Goodwill 118,000
Prepaid expenses 18,000
Cash surrender value of life insurance 133,000
Trading securities at cost (fair value $177,000) 207,000
Property, plant, and equipment
Land held for future use 259,000
Building (net) 843,000
Office equipment (net) 237,000
Current assets
Cash 340,000
Accounts receivable (net) 503,000
Inventories at lower of average cost or market 593,000
Current liabilities
Accounts payable 200,000
Notes payable (due next year) 185,000
Pension obligation 121,000
Rent payable 72,000
Premium on bonds payable 78,000
Long-term liabilities
Bonds payable 739,000
Additional information:
The company ends its fiscal accounting year on December 31.
The accumulated depreciation on the building totals $237,000.
The accumulated depreciation on the office equipment totals $155,000.
The allowance for doubtful accounts has a balance of $25,000....