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The following information was taken from the accounting records of XYZ
Company for the year ended December 31, 2021:
Utilities payable ........... $12,000
Trademark ................... ?
Retained earnings ........... $37,000 (at January 1, 2021)
Inventory ................... $26,000
Accumulated depreciation .... $15,000
Cash ........................ $11,000
Mortgage payable ............ $30,000 (due April 1, 2024)
Cost of goods sold .......... $35,000
Building .................... ?
Income tax expense .......... $24,000
Patent ...................... $17,000
Utilities expense ........... ?
Interest revenue ............ $55,000
Accounts payable ............ $27,000
Dividends ................... ?
Notes payable ............... $39,000 (due October 1, 2022)
Accounts receivable ......... $36,000
Sales revenue ............... $94,000
Equipment ................... $79,000
Common stock ................ $81,000
Advertising expense ......... $14,000
Supplies .................... $21,000
The following additional information is available:
1. The total P-P-E at December 31, 2021 was double the amount of
total current liabilities at December 31, 2021.
2. 25% of XYZ Company's 2021 net income was paid to stockholders
as dividends.
3. Total equity at December 31, 2021 was equal to $163,000.
Calculate the balance in the building account at December 31, 2021?
Expert Answer
Total current liabilities
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Question & Answer: The following information was taken from the accounting records of XYZ Company for the year ended December 31, 2021:…..
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= Utilities Payable + Accounts Payable + Notes Payable (due on October 1, 2022)
= $12,000 + $27,000 + $39,000
= $78,000
Total PPE is double the amount of total current liabilities.
Therefore,
Total PPE = $78,000 x 2 = $156,000
Also.
Total PPE = Buildings + Equipment
Thus,
$156,000 = Buildings + $79,000
Or,
Buildings = $156,000 – $79,000 = $77,000
The balance of building account at December 31, 2021 is $77,000.
