ROB of nce Sheet below and answer the following 4 Multiple-Choice questions LEM
ID: 2591920 • Letter: R
Question
ROB of nce Sheet below and answer the following 4 Multiple-Choice questions LEM #420marks) XYZ Industries bought land and built its plant 5 years ago. Land isnt ed The depreciation on the building and plant is calculated using the straight-line method, With a 20 vears and a salvage value of $2,500,000. The depreciation for the equipment, all of which was lance at 15%. Complete the XYZ Industries Balance Sheet (as of June 30,2016) Current Assets Curreat Liabilities Cash Accounts Receivable Securities Inventories Prepaid Expenses Total Current Assets 940,000 Accounts Payable 1,150,000 950,000l Notes Payable 4,100,000 1,800,000 160,000 Accrued Expense 950,000 2,130,000 eara iai 700,000 Long-Term Assets Long-Term Debt Total Long-Term Liabilities 335,000 1,200,000 Building and Plant 6.500,000 Less accumulated depreciation 0wne Equity (Net Worth) Preferred Shares Common Shares Retained Earnings Total Owners' Equity 4,500,000 Equipment 600,000 35 Less accumulated depreciation til- Total Long-Term Assets Total Liabilities and Owncrs' Equity 2223 Income Statement for XYZ Industries July 1,2015-June 30, 2016) Expenses Sales Cost of Goods Sold Gross Profit 9,500,000 4,950,000 4,550,000 950,019 246,981 350,000 1,547,000 Depreciation Expense Interest Expense Total Expenses Net Income Before Taxes 3,003,000 795,795 Income Taxes (26.5%) Net Income After TaxesExplanation / Answer
Answers:
1. Total Current Assets= Cash + Accounts Receivable + Securities + Inventories + Prepaid Expenses
= $1,940,000 + $950,000 + $4,100,000 + $1,800,000 + $160,000
Total Current Assets= $8,950,000
2. Accumulated depreciation on Building and Plant:
= $6,500,000 - $2,50,000 / 20 years
= $1,000,000
Hence, Long term assets- Building and Plant= $6,500,000 - $ 1,000,000= $5,500,000.
3. Accumulated depreciation for Equipment:
Therefore, Value of euipment after accumulated depreciation= $600,000 - $ 333,777
=$266,223
4. Total Long-Term Assets:
= Land + Building and Plant + Equipment
=$335,000 + $5,500,000 + $266,223
=$6,101,223
5. Total Assets=Total Current Assets (1) + Total Long-Term Assets (4)
= $8,950,000 + $ 6,101,223
= $15,051,223
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