Question

Presented below are a number of balance sheet items for Cheyenne, Inc., for the current year, 2017.

Goodwill $126,830 Accumulated Depreciation-Equipment $292,290
Payroll Taxes Payable 179,421 Inventory 241,630
Bonds payable 301,830 Rent payable (short-term) 46,830
Discount on bonds
payable 15,290 Income taxes payable 100,192
Cash 361,830 Rent payable (long-term) 481,830
Land 481,830 Common stock, $1 par value 201,830
Notes receivable 447,530 Preferred stock, $10 par value 151,830
Notes payable (to banks) 266,830 Prepaid expenses 89,750
Accounts payable 491,830 Equipment 1,471,830
Retained earnings ? Debt investments (trading) 122,830
Income taxes receivable 99,460 Accumulated Depreciation-Buildings 270,490
Notes payable
(long-term) 1,601,830 Buildings 1,641,830
Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of debt investments (trading) are the same. (List Current Assets in the order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment.)

Answer 1

Cheyenne, Inc.

Classified Balance Sheet as for the year ended December 31, 2017:

Assets:

Current Assets:

Cash $361,830

Notes receivable 447,530

Inventory 241,630

Prepaid expenses 89,750

Income taxes receivable 99,460

Total current assets 1,240,200

Land 481,830

Debt investments (trading) 122,830

Buildings 1,641,830

Accumulated Depreciation 270,490 1,371,340

Equipment 1,471,830

Accumulated Depreciation 292,290 1,179,540 3,155,540

Goodwill 126,830

Total Assets $4,522,570

Liabilities and Equity:

Current Liabilities:

Rent payable (short-term) 46,830

Discount on bonds payable 15,290

Payroll Taxes Payable 179,421

Accounts payable 491,830

Notes payable (to banks) 266,830

Income taxes payable 100,192

Total Current Liabilities $1,100,393

Noncurrent Liabilities:

Bonds payable 301,830

Rent payable (long-term) 481,830

Notes payable (long-term) 1,601,830

Total noncurrent liabilities $2,385,490

Shareholders' Equity:

Common stock, 400,000 shares authorized, $1 par value

Issued and outstanding 201,830 shares 201,830

Preferred stock, 200,000 shares authorized, $10 par value

Issued and outstanding, 15,183 shares 151,830 353,660

Retained earnings 683,027

Total Liabilities and Equity $4,522,570

Step-by-step explanation:

a) Data:

Goodwill $126,830

Accumulated Depreciation-Equipment $292,290

Payroll Taxes Payable 179,421

Inventory 241,630

Bonds payable 301,830

Rent payable (short-term) 46,830

Discount on bonds payable 15,290

Income taxes payable 100,192

Cash 361,830

Rent payable (long-term) 481,830

Land 481,830

Common stock, $1 par value 201,830

Notes receivable 447,530

Preferred stock, $10 par value 151,830

Notes payable (to banks) 266,830

Prepaid expenses 89,750

Accounts payable 491,830

Equipment 1,471,830

Retained earnings ?

Debt investments (trading) 122,830

Income taxes receivable 99,460

Accumulated Depreciation-Buildings 270,490

Notes payable (long-term) 1,601,830

Buildings 1,641,830

b) Cheyenne Inc.'s balance sheet for the year is classified into current assets and noncurrent assets, current liabilities and noncurrent liabilities, and shareholders' equity. This accords with the accounting equation that shows that assets are equal to liabilities and owner's' equity. The implication is that every transaction affects the two sides of the accounting equation and will be ultimately reflected in the balance sheet.