ACC421 Week 3, Question 1-5

Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.

BRUNO COMPANY BALANCE SHEET DECEMBER 31, 2012
Current assets
Cash		$261,870
Accounts receivable (net)		341,870
Inventories (lower-of-average-cost-or-market)		402,870
Equity investments (trading)—at cost (fair value $121,510)		141,510
Property, plant, and equipment
Buildings (net)		571,510
Equipment (net)		161,510
Land held for future use		176,510
Intangible assets
Goodwill		81,870
Cash surrender value of life insurance		91,870
Prepaid expenses		13,870
Current liabilities
Accounts payable		136,510
Notes payable (due next year)		126,870
Pension obligation		83,510
Rent payable		50,870
Premium on bonds payable		54,870
Long-term liabilities
Bonds payable		501,510
Stockholders’ equity
Common stock, $1.00 par, authorized 400,000 shares, issued 291,870		291,870
Additional paid-in capital		181,870
Retained earnings		?

Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $161,870 and for the office equipment, $106,870. The allowance for doubtful accounts has a balance of $18,870. The pension obligation is considered a long-term liability. (List current assets in order of liquidity. List property plant and equipment in order of buildings and equipment.)

BRUNO COMPANY Balance Sheet December 31, 2012
Assets
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2.		Introduction of a new product line.
3.		Loss of assembly plant due to fire.
4.		Sale of a significant portion of the company’s assets.
5.		Retirement of the company president.
6.		Issuance of a significant number of shares of common stock.
7.		Loss of a significant customer.
8.		Prolonged employee strike.
9.		Material loss on a year-end receivable because of a customer’s bankruptcy.
10.		Hiring of a new president.
11.		Settlement of prior year’s litigation against the company.
12.		Merger with another company of comparable size.