Question

The following are the ending balances of accounts at December 31, 2021, for the Valley Pump Corporation. Credits Debits $ 38,000 82,000 107,000 $ 23,000 70,000 146,000 365,000 113,000 101,000 Account Title Cash Accounts receivable Inventory Interest payable Investment in equity securities Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Copyright (net) Prepaid expenses (next 12 months) Accounts payable Deferred revenue (next 12 months) Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals 38,000 25,000 45,000 78,000 33,000 315,000 8,000 330,000 41,000 $979,000 $979,000 Additional Information: 1. The $146,000 balance in the land account consists of $113,000 for the cost of land where the plant and office buildings are located. The remaining $33,000 represents the cost of land being held for speculation. 2. The $70,000 balance in the investment in equity securities account represents an investment in the common stock of another corporation. Valley intends to sell one-half of the stock within the next year. 3. The notes payable account consists of a $126,000 note due in six months and a $189,000 note due in three annual installments of $63,000 each, with the first payment due in August of 2022. Required: Prepare a classified balance sheet for the Valley Pump Corporation at December 31, 2021. Use the additional information to help determine appropriate classifications and account balances. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

VALLEY PUMP CORPORATION BALANCE SHEET At December, 2021 Assets $ 38,000 Current Assets : Cash Accounts Receivable (net) Inventories $ 74,000 $ 107,000 $ 35,000 Marketable secwuties Prepaid expenses Total current assets & 45,ooo $ 299,000 Investments. $ 35,000 $ 33,000 $ 68,000 Marketable securities Land Total investments Property plant and equipment: Land Buildings Equipment $ 13,000 $365,000 & 101,ooo $ 579,000 & 151,000 $ 428,000 Less: Accumulated Depreciation Net property, plant and equipment Intangible assets a Copyright Total assets $ 25,000 $ 820,000

Liabilities and Shareholders' Equity Current liabilities : Accounts Payable Deferred revenues Notes Payable Interest Payable Current maturities of long term debt Total current liabilities Long term Mabilities Note Payable Shareholders' equity: Common stock Retained earnings Total shareholders eauity Total liabilities and shareholders equity $ 78,000 $ 33,000 $ 126,000 $ 23,000 $ 63,000 $ 323,000 $126,000 $ 330,000 $ 41,000 $ 371,000 $ 820,000 Calculation. Accounts Receivable, net = Accounts Receivable - Allowance for uncollectible Account $ 8,000 $ 82,000 - = $ 74,000 Marketable Securities - $ 70,000* = $ 35,000 Accumulated deprecation = Building depreciation + Equipment Depreciation = = $ 113,000 + $ 38,000 $ 151,000