Question

The following information is available for Ayayai Bowling Alley at December 31, 2022. Buildings Accounts Receivable Prepaid Insurance Cash Equipment Land Insurance Expense Depreciation Expense Interest Expense $127,500 14,410 4,550 16,840 60,400 55,000 Share Capital Retained Earnings (beginning) Accumulated Depreciation-Buildings Accounts Payable Notes Payable Accumulated Depreciation-Equipment Interest Payable Bowling Revenues $100,000 2,970 42,450 11,500 97,580 18,120 2,100 14,100 780 7,240 2,100

Answer 1

Preparation of a classified Balance Sheet of financial position of Ayayai Bowling Alley

Ayayai Bowling Alley

Statement of Financial position

For the year ended December 31,2022

Assets
Long term assets:
Land		55000
Buildings	127500
Less: Accumulated depreciation	(42450)	85050
Equipment	60400
Less: Accumulated depreciation	(18120)	42280	182330
Current Assets:
Prepaid insurance		4550
Accounts recievable		14410
Cash		16840	35800
Total assets			218130
Equity and laibilities
Equity
Share capital			100000
Retained Earnings			6950
Long term liabilities:
Notes payable			$84680
Current liabilities
Accounts payable		11500
Interest payable		2100
Notes payable		12900	26500
Total Equity & liabilities			218130

Notes:

1. Calculation of net income

Particulars	Amount ($)	Amount($)
Bowling revenues		14100
Less:Expenses
Insurance expense	780
Depreciation expense	7240
Interest expense	2100	(10120)
Net Income		3980

2. Calculation of Retained earnings

Particulars	Amount
Retained earnings- beginning	2970
Add: Net income	3980
Retained earnings- ending	6950

3. It was given that total note payable is $97580

Out of Total, $12900 will be paid in 2023 which is within one year and should be considered as current portion liability and remaining $84680 ($97580-$129000) should be considered as long term liability.

Therefore,

Note payable:

current liability = $12900

long term liability = $84680

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