Question

The following is the ending balances of accounts at December 31, 2018 for the Valley Pump Corporation.

Account Title	Debits		Credits
Cash	35,000
Accounts receivable	76,000
Inventories	101,000
Interest payable			20,000
Marketable securities	64,000
Land	140,000
Buildings	350,000
Accumulated depreciation—buildings			110,000
Equipment	95,000
Accumulated depreciation—equipment			35,000
Copyright (net of amortization)	22,000
Prepaid expenses (next 12 months)	42,000
Accounts payable			75,000
Deferred revenues (next 12 months)			30,000
Notes payable			300,000
Allowance for uncollectible accounts			5,000
Common stock			300,000
Retained earnings			50,000
Totals	925,000		925,000

Additional information:

1. The $140,000 balance in the land account consists of $110,000 for the cost of land where the plant and office buildings are located. The remaining $30,000 represents the cost of land being held for speculation.
2. The $64,000 in the marketable securities account represents an investment in the common stock of another corporation. Valley intends to sell one-half of the stock within the next year.
3. The notes payable account consists of a $120,000 note due in six months and a $180,000 note due in three annual installments of $60,000 each, with the first payment due in August of 2019.

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

Answer 1

Valley Pump Corporation
Classified balance sheet
As of December 31, 2018
Assets
Current assets
Cash	$    35,000.00
Accounts Receivable (net)	$    71,000.00		[$76000-$5000]
Inventories	$ 101,000.00
Prepaid expenses	$    42,000.00
Marketable securities	$    32,000.00		[$64000/2]
Total Current assets		$ 281,000.00
Investments
Marketable securities	$    32,000.00		[$64000/2]
Land	$    30,000.00
Total Investments		$   62,000.00
Property, Plant and Equipment
Land	$ 110,000.00
Building	$ 350,000.00
Equipment	$    95,000.00
Less: Accumulated Depreciation	$ (145,000.00)
Total Property, Plant and Equipment		$ 410,000.00
Intangible assets
Copyright		$   22,000.00
Total Assets		$ 775,000.00
Liabilities
Current Liabilities
Interest payable	$    20,000.00
Accounts Payable	$    75,000.00
Note payable	$ 180,000.00
Deferred Revenues	$    30,000.00
Total Current Liabilities		$ 305,000.00
Non-Current liabilities
Note payable		$ 120,000.00
Stockholders' equity
Common stock	$ 300,000.00
Retained earnings	$    50,000.00
Total Stockholders' equity		$ 350,000.00
Total Liabilities and stockholders' equity		$ 775,000.00