Question

Problem 3-3 (Algo) Balance sheet preparation [LO3-2, 3-3] The following is a December 31, 2021, post-closing trial balance for Almway Corporation. Account Title Debits Credits Cash $ 69,000 Investment in equity securities 134,000 Accounts receivable 72,000 Inventory 212,000 Prepaid insurance (for the next 9 months) 8,000 Land 114,000 Buildings 432,000 Accumulated depreciation-buildings $ 112,000 Equipment 122,000 Accumulated depreciation-equipment 72,000 Patent (net) 22,000 Accounts payable 99,000 Notes payable 166,000 Interest payable 32,000 Bonds Payable 252,000 Common stock 336,000 Retained earnings 116,000 Totals $1,185,000 $1,185,000 Additional information: 1. The investment in equity securities account includes an investment in common stock of another corporation of $42,000 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 $37,000 that the company has not used and is currently listed for sale. 3. The cash account includes $27,000 restricted in a fund to pay bonds payable that mature in 2024 and $35,000 restricted in a three-month Treasury bill. 4. The notes payable account consists of the following: a. a $42.000 note due in six months. b. a $62,000 note due in six years. c. a $62,000 note due in five annual installments of $12,400 each, with the next installment due February 15, 2022 5. The $72,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $9,000. 6. The common stock account represents 112,000 shares of no par value common stock issued and outstanding. The corporation has 600,000 shares authorized Required: Prepare a classified balance sheet for the Almway Corporation at December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.) AL MWAY CORPORATION

Answer 1

A B с 1 ALMWAY CORPORATION 2 Balance Sheet 3 At December, 2021 4 Assets 5 Current Assets 6 Cash and Cash Equivalents $ 42,000 7 Short term Investments $ 92,000 8 Accounts Receivable,net of allowance $ 81,000 9 Less: Allowance for uncollectible accounts $ -9,000 $ 72,000 10 Inventories $ 212,000 11 Prepaid Insurance $ 8,000 12 Total Current Assets $ 426,000 13 Investments 14 Marketable Securities $ 42,000 15 Land Held for Sale $ 37,000 16 Restriced cash $ 27,000 17 Total Investments $ 106,000 18 Property plant and equipment 19 Land $ 77,000 20 Buildings $ 432,000 21 Equipment $ 122,000 22 $ 631,000 23 Less: Accumulated Depreciation-Buildings $-112,000 24 Less: Accumulated Depreciation-Equipment $ -72,000 25 Net Property, plant and Equipment $ 447,000 26 Intangible assets: 27 Patents $ 22,000 28 Total Assets $1,001,000

$ 99,000 $ 32,000 $ 42,000 $ 12,400 $ 185,400 29 30 Liabilities and Shareholders Equity 31 Current Liabilities: 32 Accounts Payable 33 Interest Payable 34 Notes Payable 35 Current Maturities of long term debt 36 Total Current Liabilities 37 Long Term Liabilities: 38 Notes Payable $ 111,600 39 Bonds Payable $ 252,000 40 Total Long term Liabilities 41 42 Shareholders Equity: 43 Common Stock $ 336,000 44 Retained Earnings $ 116,000 45 Total Shareholders' Equity 46 Total Liabilities and Shareholders' Equity $ 363,600 $ 452,000 $ 1,001,000

B C N 1=69000-27000 =134000-42000 72000 212000 8000 =SUM(C6:C11) A B 1 ALMWAY CORPORATION 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 1=72000+9000 9 Less: Allowance for uncollectible accounts -9000 10 Inventories 11 Prepaid Insurance 12 Total Current Assets 13 Investments 14 Marketable Securities 42000 15 Land Held for Sale 37000 16 Restriced cash 27000 17 Total Investments 18 Property plant and equipment 19 Land =114000-B15 20 Buildings 432000 21 Equipment 122000 22 =+B19+B20+B21 23 Less: Accumulated Depreciation-Buildings - 112000 24 Less: Accumulated Depreciation-Equipment -72000 25 Net Property,plant and Equipment 26 Intangible assets: 27 Patents 28 Total Assets =SUM(B14:B16) =+B22+B23+B24 22000 =+C12+C17+C25+C27

29 30 Liabilities and Shareholders Equity 31 Current Liabilities: 32 Accounts Payable 99000 33 Interest Payable 32000 34 Notes Payable 42000 35 Current Maturities of long term debt 12400 36 Total Current Liabilities =SUM(C32:C35) 37 Long Term Liabilities: 38 Notes Payable =166000-C35-C34 39 Bonds Payable 252000 40 Total Long term Liabilities =+B38+B39 41 42 Shareholders Equity: 43 Common Stock 336000 44 Retained Earnings 116000 45 Total Shareholders' Equity =+B43+B44 46 Total Liabilities and Shareholders' Equity =+C36+C40+C45