Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 3-5 (Algo) Balance sheet preparation [LO3-2, 3-3] The following are the ending balances of accounts at December 31, 2021, for the Valley Pump Corporation.

Exercise 3-5 (Algo) Balance sheet preparation [LO3-2, 3-3]

The following are the ending balances of accounts at December 31, 2021, for the Valley Pump Corporation.

Account Title Debits Credits
Cash $ 39,000
Accounts receivable 84,000
Inventory 109,000
Interest payable $ 24,000
Investment in equity securities 72,000
Land 148,000
Buildings 370,000
Accumulated depreciationbuildings 114,000
Equipment 103,000
Accumulated depreciationequipment 39,000
Copyright (net) 26,000
Prepaid expenses (next 12 months) 46,000
Accounts payable 79,000
Deferred revenue (next 12 months) 34,000
Notes payable 320,000
Allowance for uncollectible accounts 9,000
Common stock 340,000
Retained earnings 38,000
Totals $ 997,000 $ 997,000

Additional Information:

  1. The $148,000 balance in the land account consists of $114,000 for the cost of land where the plant and office buildings are located. The remaining $34,000 represents the cost of land being held for speculation.
  2. The $72,000 balance in the investment in equity 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 $128,000 note due in six months and a $192,000 note due in three annual installments of $64,000 each, with the first payment due in August of 2022.

Required: Prepare a classified balance sheet for the Valley Pump Corporation at December 31, 2021. Use the additional information to help determine appropriate classifications and account balances. (Amounts to be deducted should be indicated by a minus sign.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bank Stability, Sovereign Debt And Derivatives

Authors: Author

1st Edition

113733214X, 9781137332141

More Books

Students also viewed these Accounting questions

Question

Detailed note on the contributions of F.W.Taylor

Answered: 1 week ago

Question

=+ How can they be incorporated into social media content?

Answered: 1 week ago