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• LO3–2, LO3–3
The following are the ending balances of accounts at December 31, 2018, for the Valley Pump Corporation.
Account Title | Debits | Credits |
Cash | $ 25,000 | |
56,000 | ||
Inventories | 81,000 | |
Interest payable | $ 10,000 | |
Marketable securities | 44,000 | |
Land | 120,000 | |
Buildings | 300,000 | |
100,000 | ||
Equipment | 75,000 | |
Accumulated depreciation—equipment | 25,000 | |
Copyright (net of amortization) | 12,000 | |
Prepaid expenses (next 12 months) | 32,000 | |
Accounts payable | 65,000 | |
Deferred revenues (next 12 months) | 20,000 | |
Notes payable | 250,000 | |
Allowance for uncollectible accounts | 5,000 | |
Common stock | 200,000 | |
70,000 | ||
Totals | $745,000 | $745,000 |
Additional Information:
1. The $120,000 balance in the land account consists of $100,000 for the cost of land where the plant and office buildings are located. The remaining $20,000 represents the cost of land being held for speculation.
2. The $44,000 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 $100,000 note due in six months and a $150,000 note due in three annual installments of $50,000 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.
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Chapter 3 Solutions
Intermediate Accounting
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