Question

Problem 3-3 Balance sheet preparation [LO3-2, 3-3] The following is a December 31, 2018, post-closing trial balance for Almway Corporation Account Title Cash InvestmentS Accounts receivable Inventories Prepaid insurance (for the next 9 months) Land Buildings Accumulated depreciation buildings Equipment Accumulated depreciation equipment Patents (net of amortization) 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 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 2021 and $28,000 set aside 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, 2019. 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

Balance sheet for the Almway corporation at December 31,2018
	Amount	Amount
Assets
Current Assets
Cash and cash equivalent($55000-$20000)	$35,000
Short term investment ($120000-$35000)	$85,000
Account receivable net of allowances	$65,000
Inventories	$205,000
Prepaid insurance	$7,000
Total current assets		$397,000
Investment
Marketable securities	$35,000
Land held for sale	$30,000
Restricted cash	$20,000
Total investment		$85,000
Plant property and equipment
Land ($100000-$30000)	$70,000
Building	$425,000
Accumulated deperation ( Building)	($105,000)
Equipment	$115,000
Accumulated deperation ( Equipment )	($65,000)
Net Plant property and equipment		$440,000
Intangible Assets
Patents ( net of amortization)		$15,000
Total Assets		$937,000
Liabilities and stock holder equity
Current liabilities
Account payable	$85,000
Interest payable	$25,000
Note payable (due in 6 months)	$35,000
Current maturity of long term debt(notes payable)	$11,000
Total current liability		$156,000
Long term liabilities
Notes payable ($145000-$35000-$11000)	$99,000
Bond payable	$245,000
Total long term liabilities		$344,000
Shareholders equity
Authorised 500000 shares
Issued and outstanding shares	$315,000
Retained earnings	$122,000
Total shareholders equity		$437,000
Total liabilities and shareholders equity		$937,000