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	Debits	Credits
Cash	77,000
Investments	142,000
Accounts Receivable	76,000
Investments	216,000
Prepaid insurance (for the next 9 Months)	6,000
Land	122,000
Buildings	436,000
Accumulated Depreciation-Buildings		116,000
Equipment	126,000
Accumulated Depreciation-Equipment		76,000
Patents (net of amortization)	26,000
Accounts Payable		107,000
Notes Payable		178,000
Interest Payable		36,000
Bonds Payable		256,000
Common Stock		348,000
Retained Earnings		110,000
Totals	1,227,000	1,227,000

Additional information:

1. The investment account includes an investment in common stock of another corporation of $46,000 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 $41,000 that the company has not used and is currently listed for sale.

3. The cash account includes $31,000 restricted in a fund to pay bonds payable that mature in 2021 and $39,000 set aside in a three-month Treasury bill.

4. The notes payable account consists of the following: a. a $46,000 note due in six months. b. a $66,000 note due in six years. c. a $66,000 note due in five annual installments of $13,200 each, with the next installment due February 15, 2019.

5. The $76,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $6,000.

6. The common stock account represents 116,000 shares of no par value common stock issued and outstanding. The corporation has 300,000 shares authorized.

Required: Prepare a classified balance sheet for the Almway Corporation at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Classified balance sheet for the Almway Corporation at December 31, 2018

ASSETS	Amount ($)	Amount ($)
Current Assets:
Cash and cash equivalents (77000-31000)	46000
Short Term Investments (142000-46000)	96000
Accounts receivable,net of allowance for uncollectible accounts of $6000	76000
Inventories	216000
Prepaid Insurance	6000
Total Current Assets		440000
Investments:
Marketable Securities	46000
Land held for sale	41000
Restricted Cash	31000
Total Investments		118000
Property,Plant and equipment assets:
Land (122000-41000)	81000
Buildings	436000
Less: Accumulated depreciation	-116000
Equipment	126000
Less: Accumulated depreciation	-76000
Net Property,plant and equipment		451000
Intangible Assets:
Patent		26000
Total Assets		1035000
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts Payable	107000
Interest Payable	36000
Notes payable	46000
Current maturities of long term debt	13200
Total Current Liabilities		202200
Long Term Liabilities:
Notes Payable (66000+66000-13200)	118800
Bonds Payable	256000
Total Long Term Liabilities		374800
Stock Holder's Equity
Common stock, no par value;300,000 shares authorized;116,000 issued and outstanding	348000
Retained earnings	110000
Total Stockholders equity		458000
Total liabilities and stockholders' equity		1035000