Question

The following is a December 31, 2021, post-closing trial balance for Almway Corporation. Account Title Debits Credits Cash $ 45,000 Investment in equity securities 110,000 Accounts receivable 60,000 Inventory 200,000 Prepaid insurance (for the next 9 months) 9,000 Land 90,000 Buildings 420,000 Accumulated depreciation—buildings $ 100,000 Equipment 110,000 Accumulated depreciation—equipment 60,000 Patent (net) 10,000 Accounts payable 75,000 Notes payable 130,000 Interest payable 20,000 Bonds Payable 240,000 Common stock 300,000 Retained earnings 129,000 Totals $ 1,054,000 $ 1,054,000 Additional information: The investment in equity securities account includes an investment in common stock of another corporation of $30,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year. The land account includes land which cost $25,000 that the company has not used and is currently listed for sale. The cash account includes $15,000 restricted in a fund to pay bonds payable that mature in 2024 and $23,000 restricted in a three-month Treasury bill. The notes payable account consists of the following: a $30,000 note due in six months. a $50,000 note due in six years. a $50,000 note due in five annual installments of $10,000 each, with the next installment due February 15, 2022. The $60,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $8,000. The common stock account represents 100,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 shares authorized. Required: Prepare a classified balance sheet for the Almway Corporation at December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

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Almway Corporation
Balance Sheet
As at 31st December, 2021
Assets	Amount $	Amount $	Note
Current Assets
Cash and cash equivalents		30,000.00	See note A
Trade and other receivables	68,000.00
Allowance for uncollectible accounts	(8,000.00)	60,000.00	See note B
Prepaid insurance		9,000.00
Investments		80,000.00	See note C
Inventories		200,000.00
Land held for sale		25,000.00	See note D
Current Assets		404,000.00
Non Current Assets
Long Term Investments
Investments in other companies	30,000.00		See note C
Long Term Investments		30,000.00
Plant, Property & Equipment
Land held for sale		65,000.00	See note D
Building	420,000.00
Accumulated depreciation	(100,000.00)	320,000.00
Equipment	110,000.00
Accumulated depreciation	(60,000.00)	50,000.00
Plant, Property & Equipment		435,000.00
Intangible Assets
Patent (net)	10,000.00
Intangible Assets		10,000.00
Other Assets
Restricted cash balance	15,000.00		See note A
Other Assets		15,000.00
Total Assets		894,000.00
Liabilities
Current Liabilities
Trade and other Payables	75,000.00
Interest Payable	20,000.00
Current portion of Notes Payable	40,000.00		See note E
Current Liabilities		135,000.00
Non Current Liabilities
Non Current portion of Notes Payable	90,000.00		See note E
Bonds Payable	240,000.00		See note F
Non Current Liabilities		330,000.00
Total Liabilities		465,000.00
Stockholder's Equity
Common Stock (500,000 shares authorized, 100,000 shares issued, no par)	300,000.00
Retained Earnings	129,000.00
Total Stockholder's Equity		429,000.00
Total Liabilities & Stockholder's Equity		894,000.00
Note/Workings
Note A	Amount $
Total Cash	45,000.00
Less: Cash $15,000 restricted to pay bonds payable that mature in 2024	15,000.00
Cash and cash equivalents to be disclosed as current assets	30,000.00
Please note that cash $23,000 restricted in a three-month Treasury bill will be shown as current assets only as it will realized within 3 months.
Note B	Amount $
Accounts receivable (net)	60,000.00
Add: Allowance for uncollectible accounts	8,000.00
Accounts receivable (gross)	68,000.00
Please note that In balance sheet Accounts receivable (gross) is shown and then Allowance for uncollectible accounts is deducted to arrive at Accounts receivable (net).
Note C	Amount $
Investment in equity securities	110,000.00
Out of above:
Investment in common stock of another corporation will be shown as long term investments as management intends to hold for at least three years	30,000.00
Remaining amount will be shown as current assets as balance of the investments is intended to be sold in the coming year.	80,000.00
Note D	Amount $
Land	90,000.00
Out of above:
$ 25,000 will be shown as current assets as the company has not used and is currently listed for sale.	25,000.00
Remaining amount will be shown as non current assets	65,000.00
Note E	Amount $		Note
Notes payable	130,000.00
Breakup
Note due in six months	30,000.00	Current portion of Notes Payable	G
Note due in six years	50,000.00	Non Current portion of Notes Payable	H
Balance
Note due in five annual installments of $ 10,000 each	50,000.00
So $ 10,000 is	10,000.00	Current portion of Notes Payable	I
Remaining $ 40,000 is	40,000.00	Non Current portion of Notes Payable	J
So total Current portion of Notes Payable	40,000.00		This is G+I
So total Non Current portion of Notes Payable	90,000.00		This is H+J
Note F
Bonds payable are maturing in 2024 so it is to be classified as Non Current Liabilities