Question

The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation.

Account Title	Debits			Credits
Cash		89,000
Short-term investments		204,000
Accounts receivable		145,000
Long-term investments		46,000
Inventory		226,000
Receivables from employees		51,000
Prepaid expenses (for 2022)		27,000
Land		291,000
Building		1,660,000
Equipment		648,000
Patent (net)		163,000
Franchise (net)		51,000
Notes receivable		305,000
Interest receivable		23,000
Accumulated depreciation—building				631,000
Accumulated depreciation—equipment				221,000
Accounts payable				200,000
Dividends payable (payable on 1/16/2022)				21,000
Interest payable				27,000
Income Taxes payable				51,000
Deferred revenue				71,000
Notes payable				322,000
Allowance for uncollectible accounts				19,000
Common stock				2,044,000
Retained earnings				322,000
Totals		3,929,000		3,929,000

Additional information:

1. The common stock represents 1.0 million shares of no par stock authorized, 610,000 shares issued and outstanding.
2. The receivables from employees are due on June 30, 2022.
3. The notes receivable are due in installments of $61,000, payable on each September 30. Interest is payable annually.
4. Short-term investments consist of securities that the company plans to sell in 2022 and $61,000 in treasury bills purchased on December 15 of the current year that mature on February 15, 2022. Long-term investments consist of securities that the company does not plan to sell in the next year.
5. Deferred revenue represents payments from customer for extended service contracts. Eighty percent of these contracts expire in 2022, the remainder in 2023.
6. Notes payable consists of two notes, one for $111,000 due on January 15, 2023, and another for $211,000 due on June 30, 2024.

Required:
Prepare a classified balance sheet for Vosburgh at December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Vosburgh Balance Sheet

As at December 31,2021

Particulars	Amount	Amount	Amount
Assets
Current Assets
Cash and Cash Equivalents		150,000
Short Term Investments		143,000
Accounts Receivables Net		126,000
Inventory		226,000
Receivable from Employees		51,000
Prepaid Expenses		27,000
Interest Receivables		23,000
Notes Receivable		61,000
Total Current Assets			807,000
Non Current Assets
Investment
Long Term Investments	46,000
Notes Receivable	244,000
Total Long Term Investments		290,000
Property Plant and Equipment
Land	291,000
Building	16,60,000
Accumulated Depreciation Building	-6,31,000
Equipment	648,000
Accumulated Depreciation Equipment	-221,000
Total Property Plant and Equipment		17,47,000
Intangible Assets
Patents Net	163,000
Franchise Net	51,000
Total Intangible Assets		214,000
Total Non Current Assets			22,51,000
Total Assets			30,58,000
Liabilities and Equity
Current Liabilities
Account Payable		200,000
Interest Payable		27,000
Dividends Payables		21,000
Income Taxes Payable		51,000
Deferred Revenue		56,800	355,800
Total Current Liabilities
Long Term Liabilities
Deferred Revenue		14,200
Notes Payables		322,000
Total Long Term Liabilities			336,200
Total Liabilities			692,000
Shareholder Equity
Common Stock 610,000 Shares Issued and Outstanding		20,44,000
Retained Earnings		3,22,000
Total Shareholders Equity			23,66,000
Total Liabilities and Shareholders Equity			30,58,000

Notes

Accounts Receivable Net = Accounts Receivables - Allowance for Uncollectible Amount

= 146,000 - 19,000

= $ 125,000

Amount of Treasury Bills of $ 61000 Maturing next year will be apart of Cash and Cash Equivalents and will be deducted from Short Term Investments.

Cash and Cash Equivalents = 89,000 + 61,000 = $ 150,000

Short Term Investments = 204,000 - 61,000 = $ 143,000

As Notes Receivable is due in Installment and Installment of $ 61,000 is due on Sep 30,2022 so it will be classified as Current Assets and Rest $ 244,000 as Long Term Asset.

As Receivables are due from Employees is less than 12 Months so it is also a Current Asset.

Deferred Revenue

80% of $ 71,000 = $ 56,800 is for the Service to be provided in less than 12 Months from Balance Sheet Date so it will be a part of Current Liabilities and Bakai of $ 14200 will be recorded as Long Term Liabilities.

As Both the Notes Payables are due for.more than 12 Months from Balance Sheet Date so they are classified as Long Term Liabilities.