Question

The Java House is developing its annual financial statements for 2014. The following amounts were correct at December 31, 2014: cash, $ 58,800; investment in shares of PAX Corporation (long term), $ 36,400; store equipment, $ 67,200; trade receivables, $ 71,820; carpet inventory, $ 154,000; prepaid rent, $ 1,120; used store equipment held for disposal, $ 9,800; accumulated depreciation, store equipment, $ 13,440; income taxes payable, $ 9,800; long- term note payable, $ 42,000; trade payables, $ 58,800; retained earnings, $ 165,100; and common shares (100,000 shares outstanding, originally sold and issued at $ 1.10 per share).
Required:
1. Based on these data, prepare the company’s statement of financial position at December 31, 2014. Use the following major captions (list the individual items under these captions):
a. Assets: current assets; long- term investments; property, plant, and equipment; and other assets.
b. Liabilities: current liabilities and long- term liabilities.
c. Shareholders’ equity: share capital and retained earnings.
2. What is the carrying amount of the store equipment? Explain what this value means.


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  • CreatedAugust 04, 2015
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