Practice Exercise 5-1 The fo lowing information is for Galileo Corporation as of

Question

Practice Exercise 5-1 The fo lowing information is for Galileo Corporation as of December 31, 2017 Restricted Cash for Retirement af long term debt $2,0D Additional Paid in Capital Equipment (oost) Inventory (work in process) Cash (unrestricted) nventory (finished gods Equity Investments (cost) Customer Mvances Unearned Service Revenue 55,uoD 72,000 112,000 Accounts Recelvable 14,000 Inventory (raw materials) 22,000 Supplies Expense 3,000 Cost of Goods Sold 17,000 05,00 9,000 Allowance for Doubtfl Accounts 3,000 12,000 Lcenses 16,000 Notes Receivable 7,000 20,000 13,000 Treasury Stock The following additional infoation is available 1. Inventories are valued at lower-of-cost-or-market using FIFO. 2. Treasury stock s recorded at cost. 3. Licenses are recorded net of accumulated amortization of $6,500. 4. Equipment is recorded at cost. Accumulated depreciation, computed on a straight ine basis, is 38,250 5. The equity investments hawe a fair value of $B,2D0. ASSume they are trading securities.) 6. The allowance for doubtful accounts app es to the accounts recelvable The notes receivable are due in full on March 31. 2019, with interest receivable every April 30·The notes bear interest at 7%.(Hint: Accrued interest due on December 31, 2017,) 7. Prepare the current assets section of Galileo Corporation's balance sheet with appropriate disclosures on the face of the belance steet. (List Current Assets in order of liquidity. Enter account name only and do not provide the descriptive infonmation) GALILEO CORPORATION Balanee Shoet (Partial)

Explanation / Answer

Galileo corporation

Balance sheet (partial)

December 31, 2017

Current assets: Cash 46000 Less: Restricted cash for retirement of long term debt (24000) 22000 Trading securities at fair value 8200 Accounts receivable 72000 Less: Allowance for doubtful accounts (3000) 69000 Interest receivable (20000*7%*9/12) 1050 Inventories at lower of cost (determined using FIFO) or market Finished goods 33000 Work in process 14000 Raw materials 60000 107000 Total current assets 207250

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