Account Title Cash Accounts receivable Inventories Interest

Account Title Cash Accounts receivable Inventories Interest payable Marketable securities Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Copyright (net of amortization) Prepaid expenses (next 12 months) Accounts payable Deferred revenues (next 12 months) Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits Credits 27,000 60,000 85,000 12,000 48,000 124,000 310,000 102,000 79,000 27,000 14,000 34,000 67,000 22,000 260,000 7,000 220,000 64,000 781,000 781,000 Additional information: 1. The $124,000 balance in the land account consists of $102,000 for the cost of land where the plant and office buildings are located 2. The $48,000 in the marketable securities account represents an investment in the common stock of another corporation. Valley 3. The notes payable account consists of a $104,000 note due in six months and a $156,000 note due in three annual installments of The remaining $22,000 represents the cost of land being held for speculation intends to sell one-half of the stock within the next year. $52,000 each, with the first payment due in August of 2019

Solution

Answer:

VALLEY PUMP CORPORATION

Balance Sheet

At December 31, 2018

Assets

Current assets:

Cash

$27,000

Marketable securities

24,000

Accounts receivable, net of allowance for

      uncollectible accounts of $7,000

53,000

Inventories

85,000

Prepaid expenses

34,000

Total current assets

223,000

Investments:

Marketable securities

$24,000

Land

22,000

Total investments

46,000

Property, plant, and equipment:

Land

102,000

Buildings

310,000

Equipment

79,000

491,000

Less: Accumulated depreciation

-129,000

Net property, plant, and equipment

362,000

Intangible assets:

Copyright

14,000

Total assets

$645,000

Liabilities and Shareholders\' Equity

Current liabilities:

Accounts payable

$67,000

Interest payable

$12,000

Differed revenue

22,000

Note payable

104,000

Current maturities of long-term debt

52,000

Total current liabilities

257,000

Long-term liabilities:

Note payable

104,000

Shareholders’ equity:

Common stock

$220,000

Retained earnings

64,000

Total shareholders’ equity

284,000

Total liabilities and shareholders’ equity

$645,000

VALLEY PUMP CORPORATION
Balance Sheet
At December 31, 2018
Assets
Current assets:
Cash		$27,000
Marketable securities		24,000
Accounts receivable, net of allowance for
uncollectible accounts of $7,000	53,000
Inventories		85,000
Prepaid expenses		34,000
Total current assets		223,000
Investments:
Marketable securities	$24,000
Land	22,000
Total investments		46,000
Property, plant, and equipment:
Land	102,000
Buildings	310,000
Equipment	79,000
	491,000
Less: Accumulated depreciation	-129,000
Net property, plant, and equipment		362,000
Intangible assets:
Copyright		14,000
Total assets		$645,000
Liabilities and Shareholders\' Equity
Current liabilities:
Accounts payable		$67,000
Interest payable		$12,000
Differed revenue		22,000
Note payable		104,000
Current maturities of long-term debt		52,000
Total current liabilities		257,000
Long-term liabilities:
Note payable		104,000
Shareholders’ equity:
Common stock	$220,000
Retained earnings	64,000
Total shareholders’ equity		284,000
Total liabilities and shareholders’ equity		$645,000