Question

The following are the ending balances of accounts at December 31, 2021. for the Valley Pump Corporation. 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 Debits Credits $ 25,000 56,000 81,000 $ 10,000 44,000 120,000 300,000 100,000 75,000 25,000 12,000 32,000 65,000 20,000 250,000 5.000 200,000 70,000 $745,000 $745,000 Additional Information: 1. The $120,000 balance in the land account consists of $100,000 for the cost of land where the plant and office buildings are located. The remaining $20,000 represents the cost of land being held for speculation. 2. The $44,000 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 $100,000 note due in six months and a $150,000 note due in three annual installments of $50,000 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

Answer:

VALLEY PUMP CORPORATION
Balance sheet
At December 31,2021
Assets
Current assets:
Cash	$25,000
Investment in Equity securities	$22,000
Investment in Land	$20,000
Accounts receivable	$56,000
Allowance for uncollectible accounts	($5,000)
Inventory	$81,000
Prepaid expenses	$32,000
Total current assets		$231,000
Investments:
Investment in Equity securities	$22,000
Total investments		$22,000
Property,plant,and Equipment:
Land	$100,000
Buildings	$300,000
Accumulated depreciation-buildings	($100,000)
Equipment	$75,000
Accumulated depreciation-equipment	($25,000)
Net property,plant,and equipment		$350,000
Intangible assets:
Copyright		$12,000
Total Assets		$615,000
Liabilities and stockholders' equity
Current liabilities:
Interest payable	$10,000
Accounts payable	$65,000
Deferred revenue	$20,000
Notes payable [150,000+50,000]	$200,000
Total current liabilities		$295,000
Long-term liabilities:
Notes payable		$50,000
Total liabilities		$345,000
Stockholders' equity:
Common stock	$200,000
Retained earnings	$70,000
Total stockholders' equity		$270,000
Total liabilities and stockholders' equity		$615,000