Question

The following is a December 31, 2021, post-closing trial balance for Almway Corporation. Account Title Cash Investment in equity securities Accounts receivable Inventory Prepaid insurance (for the next 9 months) Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Patent (net) Accounts payable Notes payable Interest payable Bonds Payable Common stock Retained earnings Totals Debits Credits $ 55,000 120,000 65,000 205,000 7,000 100,000 425,000 $ 105,000 115,000 65,000 15,000 85,000 145,000 25,000 245,000 315,000 122,000 $1,107,000 $1,107,000 Additional information: 1. The investment in equity securities account includes an investment in common stock of another corporation of $35,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year. 2. The land account includes land which cost $30,000 that the company has not used and is currently listed for sale. 3. The cash account includes $20,000 restricted in a fund to pay bonds payable that mature in 2024 and $28,000 restricted in a three-month Treasury bill. 4. The notes payable account consists of the following: a. a $35,000 note due in six months. b. a $55,000 note due in six years. c. a $55,000 note due in five annual installments of $11,000 each, with the next installment due February 15, 2022. 5. The $65,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $8,000. 6. The common stock account represents 105,000 shares of no par value common stock issued and outstanding. The corporation has 600,000 shares authorized.

Answer 1

w NP A B с 1 ALMWAY CORPORATION 2 Balance Sheet 3 At December, 2021 4 Assets 5 Current Assets 6 Cash and Cash Equivalents $ 35,000 7 Short term Investments $ 85,000 8 Accounts Receivable, net of allowance $ 73,000 9 Less: Allowance for uncollectibel accounts $ -8,000 $ 65,000 10 Net accounts receivables 11 Inventory $ 205,000 12 Prepaid Insurance $ 7,000 13 Total Current Assets $ 397,000 14 Investments 15 Marketable Securities $ 35,000 16 Land Held for Sale $ 30,000 17 Restriced cash $ 20,000 18 Total Investments $ 85,000 19 Property plant and equipment 20 Land $ 70,000 21 Buildings $ 425,000 22 Equipment $ 115,000 23 $ 610,000 24 Less: Accumulated Depreciation-Buildings $-105,000 25 Less: Accumulated Depreciation-Equipment $ -65,000 26 Net Property, plant and Equipment $ 440,000 27 Intangible assets: 28 Patents $ 15,000 29 Total Assets $ 937,000

$ 85,000 $ 25,000 $ 35,000 $ 11,000 $ 156,000 30 31 Liabilities and Shareholders Equity 32 Current Liabilities: 33 Accounts Payable 34 Interest Payable 35 Notes Payable 36 Current Maturities of long term debt 37 Total Current Liabilities 38 Long Term Liabilities: 39 Notes Payable $ 99,000 40 Bonds Payable $ 245,000 41 Total Long term Liabilities 42 Total Liabilities 43 Shareholders Equity: 44 Common Stock $ 315,000 45 Retained Earnings $ 122,000 46 Total Shareholders' Equity 47 Total Liabilities and Shareholders' Equity $ 344,000 $ 437,000 $ 937,000

A B с =55000-20000 =120000-35000 =+B8+B9 205000 7000 =SUM(C6:C12) 1 ALMWAY CORPORATION 2 Balance Sheet 3 At December, 2021 4 Assets 5 Current Assets 6 Cash and Cash Equivalents 7 Short term Investments 8 Accounts Receivable,net of allowance =65000+8000 9 Less: Allowance for uncollectibel accounts -8000 10 Net accounts receivables 11 Inventory 12 Prepaid Insurance 13 Total Current Assets 14 Investments 15 Marketable Securities 35000 16 Land Held for Sale 30000 17 Restriced cash 20000 18 Total Investments 19 Property plant and equipment 20 Land =100000-B16 21 Buildings 425000 22 Equipment 115000 23 =+B20+B21+B22 24 Less: Accumulated Depreciation-Buildings - 105000 25 Less: Accumulated Depreciation-Equipment -65000 26 Net Property,plant and Equipment 27 Intangible assets: 28 Patents 29 Total Assets =SUM(B15:B17) =+B23+B24+B25 15000 =+C13+C18+C26+C28

30 31 Liabilities and Shareholders Equity 32 Current Liabilities: 33 Accounts Payable 85000 34 Interest Payable 25000 35 Notes Payable 35000 36 Current Maturities of long term debt 11000 37 Total Current Liabilities =SUM(C33:C36) 38 Long Term Liabilities: 39 Notes Payable =145000-C36-C35 40 Bonds Payable 245000 41 Total Long term Liabilities =+B39+B40 42 Total Liabilities 43 Shareholders Equity: 44 Common Stock 315000 45 Retained Earnings 122000 46 Total Shareholders' Equity =+B44+B45 47 Total Liabilities and Shareholders' Equity =+C37+C41+C46