Question
(Balance Sheet Adjustment and Preparation) The adjusted trial balance of Black and Blue Company and other related information for the year 2020 are presented below:
(Balance Sheet Adjustment and Preparation) The adjusted trial balance of Black and Blue Company and other related information for the year 2020 are presented below:
ADJUSTED TRIAL BALANCE DECEMBER 31, 2020
| Debits |
| Credits |
Cash | $ 26,500 |
|
|
Accounts Receivable | 270,600 |
|
|
Allowance for Doubtful Accounts |
|
| $ 17,700 |
Prepaid Insurance | 6,200 |
|
|
Inventory | 241,300 |
|
|
Equity Investments (long-term) | 131,000 |
|
|
Land | 65,000 |
|
|
Construction in Process (building) | 285,000 |
|
|
Patents | 76,000 |
|
|
Equipment | 325,000 |
|
|
Accumulated DepreciationEquipment |
|
| 160,000 |
Discount on Bonds Payable | 33,000 |
|
|
Accounts Payable |
|
| 187,000 |
Accrued Expenses |
|
| 61,200 |
Notes Payable |
|
| 130,000 |
Bonds Payable |
|
| 300,000 |
Common Stock |
|
| 250,000 |
Paid-in Capital in Excess of ParCommon Stock |
|
| 186,000 |
Retained Earnings |
|
| 167,700 |
| $1,459,600 |
| $1,459,600 |
|
|
|
|
Additional information:
- The FIFO method of inventory value is used.
- The cost and fair value of the long-term equity investments is the same.
- The amount of the Construction in Progress account represents the costs expended to date on a building in the process of construction. (The company rents factory space at the present time.) The land on which the building is being constructed cost $65,000, as shown in the trial balance.
- The patents were purchased by the company at a cost of $100,000 and are being amortized on a straight-line basis.
- Of the discount on bonds payable, $3,000 will be amortized in 2021.
- The notes payable represent bank loans that are secured by long-term equity investments carried at $131,000. These bank loans are due in 2021.
- The bonds payable bear interest at 6% payable every December 31, and are due January 1, 2031.
- 500,000 shares of common stock of a par value of $1 were authorized, of which 250,000 shares were issued and outstanding.
Instructions
Prepare a balance sheet as of December 31, 2020, so that all important information is fully disclosed.
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