Question

The following are the ending balances of accounts at December 31, 2021, for the Valley Pump Corporation Account Title Debits Credits Cash $ 37,000 Accounts receivable 80,00 Inventory 105,ese Interest payable $ 22,000 Investment in equity securities 68,000 Land Buildings 144.ee 360,000 Accumulated depreciation-buildings 112.ee Equipment 99,00 Accumulated depreciation equipment Copyright (net) 37,000 24,000 Prepaid expenses (next 12 months) 44.ees Accounts payable Deferred revenue next 12 months) 77,000 32,000 Notes payable 310,000 Allowance for uncollectible accounts Connon stock 7,000 320,00 Retained earnings 44,000 Totats 1961,000 $961,000 Additional Information 1. The $144,000 balance in the land account consists of $y2,000 for the cost of land where the plant and office buildings are located. The remaining $32,000 represents the cost of land being held for speculation 2. The $68,000 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 $124.000 note due in six months and a $186.000 note due in three annual installments of $62.000 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
Classified balance sheet
At December 31,2021
Assets
Current assets:
Cash		37,000
Short-term Investment in equity securities		34,000
Accounts receivable		80,000
Allowance for uncollectible accounts		(7,000)
Inventory		105,000
Prepaid expenses		44,000
Total Current Assets		293,000
Investments:
Investment in equity securities	34,000
Land	32,000
Total investments		66,000
Property,plant,and equipment:
Land	112,000
Buildings	360,000
Accumulated depreciation-buildings	(112,000)
Equipment	99,000
Accumulated depreciation-equipment	(37,000)
Net property,plant,and equipment		422,000
Intangible assets:
Copyright		24,000
Total Assets		805,000
Liabilities and stockholders' Equity
Current liabilities:
Accounts payable		77,000
Interest payable		22,000
Deferred revenue		32,000
Notes payable (124,000+62,000)		186,000
Total current liabilities		317,000
Long-term Liabilities:
Notes payable (310,000-186,000)		124,000
Total liabilities		441,000
Stockholders' Equity:
Common stock	320,000
Retained earnings	44,000
Total stockholders' equity		364,000
Total liabilities and stockholders' Equity		805,000