Homework SourseProblem 33 Balance sheet preparation LO32 33 The following i
Problem 3-3 Balance sheet preparation [LO3-2, 3-3]
The following is a December 31, 2018, post-closing trial balance for Almway Corporation.
Credits
Additional information:
1. The investment account includes an investment in common stock of another corporation of $46,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year.
2. The land account includes land which cost $41,000 that the company has not used and is currently listed for sale.
3. The cash account includes $31,000 restricted in a fund to pay bonds payable that mature in 2021 and $39,000 set aside in a three-month Treasury bill.
4. The notes payable account consists of the following: a. a $46,000 note due in six months. b. a $66,000 note due in six years. c. a $66,000 note due in five annual installments of $13,200 each, with the next installment due February 15, 2019.
5. The $76,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $6,000.
6. The common stock account represents 116,000 shares of no par value common stock issued and outstanding. The corporation has 300,000 shares authorized.
Required: Prepare a classified balance sheet for the Almway Corporation at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
| Account Title | Debits | Credits |
| Cash | 77,000 | |
| Investments | 142,000 | |
| Accounts Receivable | 76,000 | |
| Investments | 216,000 | |
| Prepaid insurance (for the next 9 Months) | 6,000 | |
| Land | 122,000 | |
| Buildings | 436,000 | |
| Accumulated Depreciation-Buildings | 116,000 | |
| Equipment | 126,000 | |
| Accumulated Depreciation-Equipment | 76,000 | |
| Patents (net of amortization) | 26,000 | |
| Accounts Payable | 107,000 | |
| Notes Payable | 178,000 | |
| Interest Payable | 36,000 | |
| Bonds Payable | 256,000 | |
| Common Stock | 348,000 | |
| Retained Earnings | 110,000 | |
| Totals | 1,227,000 | 1,227,000 |
Solution
Classified balance sheet for the Almway Corporation at December 31, 2018
| ASSETS | Amount ($) | Amount ($) |
| Current Assets: | ||
| Cash and cash equivalents (77000-31000) | 46000 | |
| Short Term Investments (142000-46000) | 96000 | |
| Accounts receivable,net of allowance for uncollectible accounts of $6000 | 76000 | |
| Inventories | 216000 | |
| Prepaid Insurance | 6000 | |
| Total Current Assets | 440000 | |
| Investments: | ||
| Marketable Securities | 46000 | |
| Land held for sale | 41000 | |
| Restricted Cash | 31000 | |
| Total Investments | 118000 | |
| Property,Plant and equipment assets: | ||
| Land (122000-41000) | 81000 | |
| Buildings | 436000 | |
| Less: Accumulated depreciation | -116000 | |
| Equipment | 126000 | |
| Less: Accumulated depreciation | -76000 | |
| Net Property,plant and equipment | 451000 | |
| Intangible Assets: | ||
| Patent | 26000 | |
| Total Assets | 1035000 | |
| LIABILITIES AND STOCKHOLDER\'S EQUITY | ||
| Current Liabilities: | ||
| Accounts Payable | 107000 | |
| Interest Payable | 36000 | |
| Notes payable | 46000 | |
| Current maturities of long term debt | 13200 | |
| Total Current Liabilities | 202200 | |
| Long Term Liabilities: | ||
| Notes Payable (66000+66000-13200) | 118800 | |
| Bonds Payable | 256000 | |
| Total Long Term Liabilities | 374800 | |
| Stock Holder\'s Equity | ||
| Common stock, no par value;300,000 shares authorized;116,000 issued and outstanding | 348000 | |
| Retained earnings | 110000 | |
| Total Stockholders equity | 458000 | |
| Total liabilities and stockholders\' equity | 1035000 |
![Problem 3-3 Balance sheet preparation [LO3-2, 3-3] The following is a December 31, 2018, post-closing trial balance for Almway Corporation. Credits Additional i](/WebImages/17/problem-33-balance-sheet-preparation-lo32-33-the-following-i-1031426-1761534595-0.webp "Problem 3-3 Balance sheet preparation [LO3-2, 3-3] The following is a December 31, 2018, post-closing trial balance for Almway Corporation. Credits Additional i")
![Problem 3-3 Balance sheet preparation [LO3-2, 3-3] The following is a December 31, 2018, post-closing trial balance for Almway Corporation. Credits Additional i](/WebImages/17/problem-33-balance-sheet-preparation-lo32-33-the-following-i-1031426-1761534595-1.webp "Problem 3-3 Balance sheet preparation [LO3-2, 3-3] The following is a December 31, 2018, post-closing trial balance for Almway Corporation. Credits Additional i")
