E5-5B (Current Assets Section of the Balance Sheet
) Presented below are selected accounts of Coffey
Company at December 31, 2007.
Finished Goods $ 78,000 Cost of Goods Sold $3,150,000
Revenue Received in Advance 135,000 Notes Receivable 60,000
Bank Overdraft 12,000 Accounts Receivable 241,500
Equipment 379,500 Raw Materials 310,500
Work-in-Process 51,000 Supplies Expense 90,000
Cash 55,500 Allowance for Doubtful Accounts 18,000
Short-term Investments in Stock 46,500 Licenses 27,000
Customer Advances 54,000 Additional Paid-in Capital 132,000
Cash Restricted for Plant Expansion 75,000 Treasury Stock
The following additional information is available.
1. Inventories are valued at lower-of-cost-or-market using LIFO.
2. Equipment is recorded at cost. Accumulated depreciation
, computed on a straight-line basis, is
3. The short-term investments have a fair value of $43,500. (Assume they are trading securities.)
4. The notes receivable are due April 30, 2009, with interest receivable every April 30. The notes bear
interest at 12%. (Hint: Accrue interest due on December 31, 2007.)
5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of
$75,000 are pledged as collateral on a bank loan.
6. Licenses are recorded net of accumulated amortization of $21,000.
7. Treasury stock is recorded at cost.
Prepare the current assets section of Coffey Company's December 31, 2007, balance sheet, with appropriate disclosures.