Question

Exercise 2-06 The following items are taken from the financial statements of Sandhill Co. at December 31, 2022. Land $195,900 Accounts receivable 21,500 Supplies 9,300 Cash 12,100 Equipment 83,400 Buildings 263,200 Land improvements 45,700 Notes receivable (due in 2023) 5,300 Accumulated depreciation—land improvements 13,100 Common stock 72,500 Retained earnings (December 31, 2022) 505,000 Accumulated depreciation—buildings 34,300 Accounts payable 9,600 Mortgage payable 86,650 Accumulated depreciation—equipment 18,950 Interest payable 3,900 Income taxes payable 15,700 Patents 47,700 Investments in stock (long-term) 71,100 Debt investments (short-term) 4,500 Prepare a classified balance sheet. Assume that $9,800 of the mortgage payable will be paid in 2023. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings, Equipment and Land Improvements.)

Answer 1

Sandhill Company
Balance Sheet
As at 31st December 2022
Particulars		Amount	Amount
Assets
Cash		$12,100
Debt Investment		$4,500
Account Receivable		$21,500
Notes Receivable		$5,300
Supplies		$9,300
Current Assets			$52,700
Investment
Investment in Stock			$71,100
Property Plant & Equipment
Land		$1,95,900
Building	$2,63,200
Less: Accumulated Depreciation - Building	($34,300)	$2,28,900
Equipment	$83,400
Less: Accumulated Depreciation - Equipment	($18,950)	$64,450
Land Improvement	$45,700
	($13,100)	$32,600	$5,21,850
Intangible Assets
Patent			$47,700
Total Assets			$6,93,350
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable		$9,600
Interest Payable		$3,900
Income Tax Payable		$15,700
Mortgage Payable (Short term)		$9,800
Current Liabilities			$39,000
Mortgage Payable			$76,850
Total Liabilities			$1,15,850
Shareholders' Equity
Common Stock		$72,500
Retained Earnings		$5,05,000
Total Shareholders' Equity			$5,77,500
Total Liabilities and Shareholders' Equity			$6,93,350