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ACC - Arnold Corporation & Bruno Company




Question;Mary Pierce is the controller of Arnold Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year.For each item below, indicate the dollar amount to be reported as a current liability as of December 31, 2012. Reported as(a) On December 20, 2012, an employee filed a legal action against Arnold for $106,400 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote. $ (b) Bonuses to key employees based on net income for 2012 are estimated to be $164,600. $ (c) On December 1, 2012, the company borrowed $937,200 at 8% per year. Interest is paid quarterly. $ (d) Credit sales for the year amounted to $10,178,300. Arnold?s expense provision for doubtful accounts is estimated to be 2% of credit sales. $ (e) On December 15, 2012, the company declared a $2.80 per share dividend on the 41,900 shares of common stock outstanding, to be paid on January 5, 2013. $ (f) During the year, customer advances of $165,900 were received, $51,700 of this amount was earned by December 31, 2012. Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.BRUNO COMPANYBALANCE SHEETDECEMBER 31, 2012Current assets Cash $264,560 Accounts receivable (net) 344,560 Inventories (lower-of-average-cost-or-market) 405,560 Equity investments (trading)?at cost (fair value $124,770) 144,770Property, plant, and equipment Buildings (net) 574,770 Equipment (net) 164,770 Land held for future use 179,770Intangible assets Goodwill 84,560 Cash surrender value of life insurance 94,560 Prepaid expenses 16,560Current liabilities Accounts payable 139,770 Notes payable (due next year) 129,560 Pension obligation 86,770 Rent payable 53,560 Premium on bonds payable 57,560Long-term liabilities Bonds payable 504,770Stockholders? equity Common stock, $1.00 par, authorized 400,000 shares, issued 294,560 294,560 Additional paid-in capital 184,560 Retained earnings? Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $164,560 and for the office equipment, $109,560. The allowance for doubtful accounts has a balance of $21,560. The pension obligation is considered a long-term liability. (List current assets in order of liquidity. List property plant and equipment in order of buildings and equipment.)BRUNO COMPANYBalance SheetDecember 31, 2012Assets


Paper#40908 | Written in 18-Jul-2015

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