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Johnson Company_Financial statements




Problem 1-2: Johnson Company Financial Data;Account;Amount;Cash;$9,000;Investments (short-term);$4,000;Accounts receivable;$13,000;Inventory;$22,000;Notes receivable (long-term);$1,000;Equipment;$48,000;Factory building;$90,000;Intangibles;$3,000;Accounts payable;$15,000;Accrued liabilities payable;$2,000;Notes payable (short-term);$7,000;Long-term notes payable;$46,000;Contributed capital;$90,000;Retained earnings;$30,000;To complete this problem, you may wish to use the Excel template provided in the resources.;During the year 2013, Johnson Company had the following summarized activities;Purchased short-term investments for $10,000 cash.;Lent $8,000 to a supplier who signed a three-year note.;Purchased equipment that cost $28,000, paid $4,000 cash and signed a one-year note for the balance.;Hired a new president at the end of the year. The contract was for $110,000 per year plus options to purchase company stock at a set price based on company performance.;Issued an additional 1,000 shares of capital stock for $12,000 cash.;Borrowed $20,000 cash from a local bank, payable in three months.;Purchased a patent (an intangible asset) for $4,000 cash.;Built an addition to the factory for $45,000, paid $10,000 in cash and signed a three-year note for the balance.;Returned defective equipment to the manufacturer, receiving a cash refund of $1,000.;Using knowledge from prior courses, work experience, textbooks, or Internet sources, as well as the financial data provided above, complete the following five items;Create T-accounts for each of the accounts on a balance sheet and enter the balances at the end of 2012 as beginning balances for 2013. Prepare a trial balance for 12/31/12.;Record each of the events for 2013 in T-accounts and determine the ending balances. For each recording (posting), include the identifying letter (a through i). Prepare a trial balance for 12/31/12.;Explain why you did or did not record item d, the hiring of the president, in a T-account.;Prepare a balance sheet at December 31, 2013. Classify the balance sheet as appropriate (into current assets, fixed assets, and so on).;Compute the current ratio for 2013. Interpret this ratio as it applies to Johnson Company at December 31, 2013, as compared to December 31, 2012.


Paper#80667 | Written in 18-Jul-2015

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