Question

The following balance sheet for the Hubbard Corporation was prepared by the company:

HUBBARD CORPORATION
Balance Sheet
At December 31, 2021
Assets
Buildings $754,000
Land 262,000
Cash 64,000
Accounts receivable (net) 128,000
Inventory 248,000
Machinery 284,000
Patent (net) 104,000
Investment in equity securities 68,000
Total assets $1,912,000

Liabilities and Shareholders' Equity
Accounts payable $219,000
Accumulated depreciation 259,000
Notes payable 508,000
Appreciation of inventory 84,000
Common stock (authorized and issued
104,000 shares of no par stock) 416,000
Retained earnings 426,000
Total liabilities and shareholders' equity $1,912,000

Additional information:
The buildings, land, and machinery are all stated at cost except for a parcel of land that the company is holding for future sale. The land originally cost $54,000 but, due to a significant increase in market value, is listed at $128,000. The increase in the land account was credited to retained earnings. The investment in equity securities account consists of stocks of other corporations and are recorded at cost, $24,000 of which will be sold in the coming year. The remainder will be held indefinitely. Notes payable are all long term. However, a $140,000 note requires an installment payment of $35,000 due in the coming year. Inventory is recorded at current resale value. The original cost of the inventory is $164,000.

Required:
Prepare a corrected classified balance sheet for the Hubbard Corporation at December 31, 2018.

Answer 1

Assets

Current assets

Cash $64,000

Accounts receivable (net) $128,000

Inventory $164,000

Available for sale securities $24,000

Total current assets $380,000

Non-current assets

Buildings $754,000

Land $188,000

Machinery $284,000

Patent (net) $104,000

Investment in equity securities $44,000

Accumulated depreciation 259,000

Total non-current assets $1,115,000

Total assets $1,495,000

Liabilities and Shareholders' Equity

Current liabilities

Accounts payable $219,000

Current portion of long term debt $35,000

Total current liabilities $254,000

Long term liabilities

Notes payable $473,000

Total long term liabilities $473,000

Stockholders' equity

Common stock (authorized and issued

104,000 shares of no par stock) $416,000

Retained earnings $352,000

Total equity $768,000

Total liabilities and shareholders' equity $1,495,000