Question

Problem 5-2 Presented below are a number of balance sheet items for Sheffield, Inc. for the current year, 2020. Goodwill $128,780 Accumulated Depreciation-Equipment $292,310 Payroll Taxes Payable 181,371 Inventory 243,580 Bonds payable Rent payable (short-term) 303,780 48,780 Discount on bonds payable Income taxes payable 15,310 102,142 Cash Rent payable (long-term) Common stock, $1 par value 363,780 483,780 Land 203,780 483,780 Preferred stock, $10 par value Notes receivable 449,480 153,780 Prepaid expenses Notes payable (to banks) 268,780 91,700 493,780 Equipment Debt investments (trading) Accounts payable 1,473,780 Retained earnings 124,780 Accumulated Depreciation-Buildings Buildings Income taxes receivable 101,410 270,510 Notes payable (long-term) 1,603,780 1,643,780 Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of debt investments (trading) are the same. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment.)

Answer 1

SHEFFIELD, INC.
BALANCE SHEET
Assets		2020
Current Assets
	Cash	$   3,63,780
	Accounts receivable	$   4,49,480
	Inventory	$   2,43,580
	Prepaid expenses	$       91,700
	Short-term investments	$   1,24,780
	Total current assets	$ 12,73,320
Fixed (Long-Term) Assets
	Long-term investments
	Property, plant, and equipment	$ 36,01,340
	(Less accumulated depreciation)	$ -5,62,820
	Intangible assets	$   1,28,780
	Total fixed assets	$ 31,67,300
Other Assets
	Income tax receivable	$   1,01,410
	Other- Discount on bonds	$       15,310
	Total Other Assets	$   1,16,720
Total Assets		$ 45,57,340
Liabilities and Owner's Equity
Current Liabilities
	Accounts payable	$   4,93,780
	Notes payable	$   2,68,780
	Rent Payable	$       48,780
	Payroll taxes payable	$   1,81,371
	Income tax payable	$   1,02,142
	Total current liabilities	$ 10,94,853
Long-Term Liabilities
	Rent Payable	$   4,83,780
	Notes payable	$ 16,03,780
	Bonds Payable	$   3,03,780
	Total long-term liabilities	$ 23,91,340
Owner's Equity
	Stock	$   3,57,560
	Retained earnings	$   7,13,587
	Total owner's equity	$ 10,71,147
Total Liabilities and Owner's Equity		$ 45,57,340

Property, plant, and equipment
Land	$   4,83,780
Equipment	$ 14,73,780
Building	$ 16,43,780
	$ 36,01,340

(Less accumulated depreciation)
Equipment	$   2,92,310
Building	$   2,70,510
	$   5,62,820

Stock
Common Stock	$   2,03,780
Preferred stock	$   1,53,780
	$   3,57,560

Retained earnings
Total Assets	$ 45,57,340
Total Liabilities and Owner's Equity except retained earnings	$ 38,43,753
Retained earnings	$   7,13,587