Question

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:_______.
The investment in equity securities account includes an investment in common stock of another corporation of $36,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year. The land account includes land which cost $31,000 that the company has not used and is currently listed for sale. The cash account includes $21,000 restricted in a fund to pay bonds payable that mature in 2024 and $29,000 restricted in a three-month Treasury bill. The notes payable account consists of the following: a $36,000 note due in six months. a $56,000 note due in six years. a $56,000 note due in five annual installments of $11,200 each, with the next installment due February 15, 2022. The $66,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $9,000. The common stock account represents 106,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 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

Almway Corporation

Classified Balance Sheet

As of December 31, 2018

Assets

Current Assets:

Cash $27,000

Restricted fund (treasury bill) 29,000

Marketable Investments 142,000

Accounts Receivable 85,000

Allowance for Uncollectibles (9,000)

Short-term investment 180,000

Prepaid insurance

(for the next 9 Months) 6,000 $460,000

Long-term Assets:

Restricted fund (bonds payable) 21,000

Long-term investment 36,000

Land for sale 31,000

Land in use 91,000

Buildings 436,000

Accumulated Depreciation (116,000)

Equipment 126,000

Accumulated Depreciation (76,000)

Patents (net of amortization) 26,000 $575,000

Total assets $1,035,000

Liabilities and Equity

Current Liabilities:

Accounts Payable 107,000

Short-term notes payable 47,500

Interest Payable 36,000 $190,500

Long-term liabilities:

Long-term notes payable 130,500

Bonds Payable 256,000 $386,500

Total liabilities $577,000

Equity:

Common Stock 348,000

Retained Earnings 110,000 $458,000

Total liabilities and equity $1,035,000

Step-by-step explanation:

a) Data and Calculations:

Almway Corporation

Trial Balance as of December 31, 2018

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 and Analysis:

a. Investments in equity 216,000:

Short-term investment 180,000

Long-term investment 36,000

b. Land 122,000:

Land for sale 31,000

Land in use 91,000

c. Cash 77,000:

Restricted fund (bonds payable) 21,000

Restricted fund (treasury bill) 29,000

Cash balance 27,000

d. Notes Payable 178,000:

Short-term notes payable 36,000 + 11,500 = $47,500

Long-term notes payable 130,500

e. Accounts Receivable 76,000:

Allowance for uncollectibles 9,000

Accounts receivable 85,000

f. Common Stock 348,000:

Authorized shares, 500,000

106,000 Issued shares, no par 348,000

Almway Corporation

Adjusted Trial Balance as of December 31, 2018

Account Title Debits Credits

Cash 27,000

Restricted fund (bonds payable) 21,000

Restricted fund (treasury bill) 29,000

Marketable Investments 142,000

Accounts Receivable 85,000

Allowance for Uncollectibles 9,000

Short-term investment 180,000

Long-term investment 36,000

Prepaid insurance

(for the next 9 Months) 6,000

Land for sale 31,000

Land in use 91,000

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

Short-term notes payable 47,500

Long-term notes payable 130,500

Interest Payable 36,000

Bonds Payable 256,000

Common Stock 348,000

Retained Earnings 110,000

Totals 1,236,000 1,236,000