Question

The following are the ending balances of accounts at December 31, 2021, for the Valley Pump Corporation.

Account Title		Debits			Credits
Cash	$	38,000
Accounts receivable		82,000
Inventory		107,000
Interest payable				$	23,000
Investment in equity securities		70,000
Land		146,000
Buildings		365,000
Accumulated depreciation—buildings					113,000
Equipment		101,000
Accumulated depreciation—equipment					38,000
Copyright (net)		25,000
Prepaid expenses (next 12 months)		45,000
Accounts payable					78,000
Deferred revenue (next 12 months)					33,000
Notes payable					315,000
Allowance for uncollectible accounts					8,000
Common stock					330,000
Retained earnings					41,000
Totals	$	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 As on December 31, 2021 Assets Current Assets: Cash Short term investments Accounts Receivable $82,000 Less: Allowance for uncollectible account -$8,000 Accounts Receivable (net) Inventory Prepaid expenses Total Current Assets $38,000 $35,000 $74,000 $107,000 $45,000 $299,000 Long term Investments: Investment in equity securities Land held for speculation $35,000 $33,000 $68,000 Property Plant and Equipment Land $113,000 Buildings Less: Accumulated depreciation $365,000 -$113,000 $252,000 Equipment Less: Accumulated depreciation Property Plant and Equipment (net) $101,000 -$38,000 $63,000 $428,000 $25,000 $820,000 Intangibles: Copyright (net) Total Assets Liabilities and Shareholders' Equity Current Liabilities: Accounts payable Short term notes payable Short term portion of long term notes payable Deferred revenue Interest payable Total current liabilities $78,000 $126,000 $63,000 $33,000 $23,000 $323,000 Long-term Liabilities Long term notes payable Total Liabilities $126,000 $449,000 Shareholders' Equity: Common stock Retained earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity $330,000 $41,000 $371,000 $820,000