*Problem 5-4 Presented below is the balance sheet of Ayayai Corporation as of De
ID: 2547945 • Letter: #
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*Problem 5-4 Presented below is the balance sheet of Ayayai Corporation as of December 31, 2017. AYAYAI CORPORATION BALANCE SHEET DECEMBER 31, 2017 Assets Goodwill (Note 2) Buildings (Note 1) Inventory Land Accounts receivable Treasury stock (50,000 shares) Cash on hand Assets alloated to trustee for plant expansion 121,740 1,640,000 313,840 950,000 171,740 88,740 177,640 Cash in bank 71,740 139,740 $3,675,180 Debt investments (held-to-maturity) Equities Notes payable (Note 3) Common stock, authorized and issued, 1,000,000 shares, no par Retained earnings Noncontrolling interest Appreciation capital (Note 1) Income tax payable Reserve for depreciation recorded to date on the building 601,740 1,151,740 804,740 56,740 571,740 76,740 411,740 $3,675,180 Note 1: Buildings are stated at cost, except for one building that was recorded at appraised value. The excess of appraisal value over cost was $571,740. Depreciation has been recorded based on cost. Note 2: Gn the amount of $121,740 was recognized because the company believed that book value was not an accurate representation of the fair value of the company. The gain of $121,740 was credited to Retained Earnings. Note 3: Notes payable are long-term except for the current installment due of $100,000 Prepare a corrected classified balance sheet in good form. The notes above are for information only. (List Current Assets in order of liquidityExplanation / Answer
AYAYAI CORPORARATION
Balance sheet
December 31 2017
$
$
$
Current assets
Cash
177640
Accounts receivable
171740
Inventory
313840
Total current assets
663220
Long term investments
Assets allocated to trustee for expansion
Cash in Bank
71740
Debt investments - held to maturity
139740
211480
Property plant and equipment
Land
950000
Buildings (NOTE 1)
1068260
Less: Accumulated depreciation
-411740
656520
1606520
Total Assets
2481220
Laibilities and stockholdes equity
Current liabilities
Notes payable - current installment
100000
Income taxes payable
76740
Total current liabilities
176740
Long term liabilities
Notes Payable (601740-100000)
501740
501740
Total liabilities
678480
Stock holders' equity
Common stock no par 1.000,000 authorized and issued
950000 shares outstanding
1151740
Retained earnings (note 2)
683000
Less: Trreasury stock
-88740
Stockholders
1746000
Equity attributable to non controlling interest
56740
Total stock holders' equity
1802740
Total liabilities and stockholders' equity
2481220
Note 1:
Eliminate excess of appraisal value over cost from the buildings account
(1640000-571740)
Note 2 :
Remove goodwill from retained earnings
(804740-121740)
AYAYAI CORPORARATION
Balance sheet
December 31 2017
$
$
$
Current assets
Cash
177640
Accounts receivable
171740
Inventory
313840
Total current assets
663220
Long term investments
Assets allocated to trustee for expansion
Cash in Bank
71740
Debt investments - held to maturity
139740
211480
Property plant and equipment
Land
950000
Buildings (NOTE 1)
1068260
Less: Accumulated depreciation
-411740
656520
1606520
Total Assets
2481220
Laibilities and stockholdes equity
Current liabilities
Notes payable - current installment
100000
Income taxes payable
76740
Total current liabilities
176740
Long term liabilities
Notes Payable (601740-100000)
501740
501740
Total liabilities
678480
Stock holders' equity
Common stock no par 1.000,000 authorized and issued
950000 shares outstanding
1151740
Retained earnings (note 2)
683000
Less: Trreasury stock
-88740
Stockholders
1746000
Equity attributable to non controlling interest
56740
Total stock holders' equity
1802740
Total liabilities and stockholders' equity
2481220
Note 1:
Eliminate excess of appraisal value over cost from the buildings account
(1640000-571740)
Note 2 :
Remove goodwill from retained earnings
(804740-121740)
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