The Following Additional Information Is Available1 Inventori

The Following Additional Information Is Available1 Inventories Are V 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 $50,600. 3. The short-term investments have a fair value of $29,000. (Assume they are trading securities.) 4. The notes receivable are due April 30, 2016, with interest receivable every April 30. The notes bear interest at 6%. 5. The allowance for doubtful accounts applies to the accounts receivable.

Accounts receivables of $50,000 are pledged as collateral on a bank loan. 6. Licenses are recorded net of accumulated amortization of $14,000. 7. Treasury stock is recorded at cost. Instructions Prepare the current assets section of Yasunari Kawabata Company’s December 31, 2014, balance sheet, with appropriate disclosures.

Paper For Above instruction The task involves preparing the current assets section of Yasunari Kawabata Company's balance sheet as of December 31, 2014, incorporating the provided financial information and disclosures. The current assets section comprises cash and cash equivalents, short-term investments, accounts receivable (net of allowance for doubtful accounts), notes receivable (current portion), inventory, and other liquid assets. This section must accurately reflect the company's financial position based on the given data and adhere to proper accounting principles.

1. Cash and Cash Equivalents Typically, cash and cash equivalents include cash on hand, bank deposits, and short-term liquid investments with original maturities of three months or less. Since the provided data does not specify the cash balances, we assume the cash component is included separately and focus on other current assets. If cash were specified elsewhere, it would be listed here, but given the data, it remains unspecified.

2. Short-Term Investments The short-term investments are valued at fair value of $29,000, and since these are trading securities, the fair value should be disclosed. As per accounting standards, short-term investments classified as trading securities are recorded at fair value, and unrealized gains or losses are included in earnings. Therefore, the short-term investments are reported at $29,000, consistent with the fair value disclosure.

3. Accounts Receivable, net

The accounts receivable are $50,000, but they are pledged as collateral for a bank loan. The allowance for doubtful accounts applies to these receivables. To compute net receivables, we need to subtract the allowance for doubtful accounts. However, the specific allowance amount is not provided in the data; assuming the allowance is reflected within the overall accounts receivable or needs to be estimated, we report net accounts receivable as $50,000 minus the allowance for doubtful accounts. For illustration, if we assume an allowance of $2,000, then net accounts receivable would be $48,000.

Given the emphasis on disclosures, the allowance account's existence must be disclosed. Since no specific amount is provided, we mention the allowance for doubtful accounts as a note or disclosure.

4. Notes Receivable (Current Portion) The notes receivable are due by April 30, 2016, meaning the entire amount is classified as a current asset, given it is due within the upcoming year. The notes bear 6% interest, which accrues annually and is receivable every April 30. The principal amount of the notes is not specified, but for the current assets section, the principal would be included in notes receivable. Any accrued interest receivable as of December 31, 2014, must be recognized.

If the notes payable are a certain amount, that amount would be included here. Let's assume Notes Receivable is a certain amount, say $X. The interest receivable accrued as of December 31, 2014, can be calculated as: Interest = Principal × Rate × Time (in years) Assuming the note was issued earlier in 2014 and the accrued interest period is approximately 8 months (from August 31, 2014, to December 31, 2014), interest accrued = principal × 6% × 8/12.

Since specific principal and accrued interest amounts are not provided, the notes receivable would be recorded at face value, with an additional interest receivable disclosed if applicable.

5. Inventory The inventory is valued at the lower of cost or market using the LIFO method. The actual inventory balance is not provided in the data; therefore, for the balance sheet, inventory is reported at its valuation, which would be the lower of cost or market based on internal records. Any disclosures about inventory valuation method and inventory amount should be included.

6. Other Liquid Assets Other current assets such as prepaid expenses, supplies, or other receivables are not specified. Therefore, they are excluded from the current assets section unless provided.

Summary of Current Assets Based on the provided information and standard financial reporting principles, the current assets section of Yasunari Kawabata’s balance sheet as of December 31, 2014, should include: Cash and cash equivalents (unspecified) Short-term investments: $29,000 Accounts receivable: $50,000 less allowance for doubtful accounts (disclosed) Notes receivable, due within a year: amount and accrued interest (if specified) Inventory: valued at lower of cost or market, using LIFO All these items should be disclosed with appropriate notes explaining valuation methods, pledged collateral, and amortization of licenses, as relevant. The notes receivable and allowance for doubtful accounts should be clearly noted to provide full transparency in the financial reporting.

References Financial Accounting Standards Board (FASB). (2020). Accounting Standards Codification 310 Receivables.

Financial Accounting Standards Board (FASB). (2022). Accounting Standards Codification 330 Inventory.

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