Document Preview: Problem 24-1 8/30/14 7:28 AM
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251113: 251113: Intermediate Accounting Theory and Practice (Online) X 120C (Summer 2014) / Chapter 24 Graded
Problems
*Problem 24-1
Your firm has been engaged to examine the financial statements of Almaden Corporation for the year 2014. The bookkeeper who
maintains the financial records has prepared all the unaudited financial statements for the corporation since its organization on
January 2, 2009. The client provides you with the information below.
ALMADEN CORPORATION
BALANCE SHEET
DECEMBER 31, 2014
Assets Liabilities
Current assets $1,884,860 Current liabilities $966,240
Other assets 5,192,850 Long-term liabilities 1,493,060
Capital 4,618,410
$7,077,710 $7,077,710
An analysis of current assets discloses the following.
Cash (restricted in the amount of $302,770 for plant expansion) $571,670
Investments in land 185,800
Accounts receivable less allowance of $30,560 481,920
Inventories (LIFO flow assumption) 645,470
$1,884,860
Other assets include:
Prepaid expenses $63,290
Plant and equipment less accumulated depreciation of $1,443,300 4,137,400
Cash surrender value of life insurance policy 84,310
Unamortized bond discount 44,400
Notes receivable (short-term) 162,520
Goodwill 253,870
Land 447,060
$5,192,850
Current liabilities include:
Accounts payable $512,100
Notes payable (due XXXXXXXXXX,550
Estimated income taxes payable 145,590
Premium on common stock 151,000
$966,240
Long-term liabilities include:
Unearned revenue $490,790
Dividends payable (cash) 201,870
8% bonds payable (due May 1, XXXXXXXXXX,400
$1,493,060
Capital includes:
Retained earnings $2,768,510
Capital stock, par value $10; authorized 200,000 shares, 184,990 shares 1,849,900
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Capital stock, par value $10; authorized 200,000 shares, 184,990 shares 1,849,900
issued
$4,618,410
The supplementary...