Problem 3-3 (Static) Balance sheet preparation [LO3-2, 3-3]
The following is a December 31, 2024, post-closing trial balance for Almway Corporation.
Account Title Debits Credits
Cash $ 45,000
Investment in equity securities 110,000
Accounts receivable 60,000
Inventory 200,000
Prepaid insurance (for the next 9 months) 9,000
Land 90,000
Buildings 420,000
Accumulated depreciation—buildings $ 100,000
Equipment 110,000
Accumulated depreciation—equipment 60,000
Patent (net) 10,000
Accounts payable 75,000
Notes payable 130,000
Interest payable 20,000
Bonds Payable 240,000
Common stock 300,000
Retained earnings 129,000
Totals $ 1,054,000 $ 1,054,000
Additional information:
The investment in equity securities account includes an investment in common stock of another corporation of $30,000 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 $25,000 that the company has not used and is currently listed for sale.
The cash account includes $15,000 restricted in a fund to pay bonds payable that mature in 2027 and $23,000 restricted in a three-month Treasury bill.
The notes payable account consists of the following:
a $30,000 note due in six months.
a $50,000 note due in six years.
a $50,000 note due in five annual installments of $10,000 each, with the next installment due February 15, 2025.
The $60,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $8,000.
The common stock account represents 100,000 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, 2024.
Almway Corporation
Balance Sheet
December 31, 2024
Assets
Current Assets:
Cash $ 45,000
Restricted cash 15,000
Accounts Receivable 60,000
Less: Allowance for uncollectible accounts (8,000)
Prepaid Insurance 9,000
Total Current Assets $ 121,000
Investments:
Investment in Equity Securities $110,000
Total Investments $110,000
Property, Plant, and Equipment:
Land $ 90,000
Less: Land held for sale (25,000)
Buildings 420,000
Less: Accumulated Depreciation (100,000)
Equipment 110,000
Less: Accumulated Depreciation (60,000)
Total Property, Plant, and Equipment $ 435,000
Intangible Assets:
Patent (net) $ 10,000
Total Intangible Assets $ 10,000
Total Assets $676,000
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $ 75,000
Notes Payable 30,000
Interest Payable 20,000
Total Current Liabilities $ 125,000
Long-Term Liabilities:
Bonds Payable $ 240,000
Total Long-Term Liabilities $ 240,000
Stockholders' Equity:
Common Stock $ 300,000
Retained Earnings 129,000
Total Stockholders' Equity $ 429,000
Total Liabilities and Stockholders' Equity $ 676,000