Problem 3

Burchette Industries

Post-Closing Trial Balance

December 31, 2024

Accounts

Debits

Credits

Additional Information:

Cash

$ 45,000

1) Common Stock account represents 100,000 shares of no par common stock issued

Investment in Equity Securities

$ 110,000

and outstanding. Burchette Industries has 500,000 shares authorized.

Accounts Receivable

$ 60,000

2) The Accounts Receivable balance is net of an allowance for uncollectible accounts of $8,000.

Inventory

$ 200,000

3) The Cash account includes $15,000 of restricted funds to pay bonds payable that mature

Prepaid Insurance (next 9 months)

$ 9,000

in 2027 and $23,000 restricted in a 3-month Treasury bill.

Land

$ 90,000

4) The Land account includes unused land with a cost basis of $25,000 that is currently for sale.

Buildings

$ 420,000

5) The Investment in Equity Securities account includes a $30,000 investment in the common stock of

Accumulated Depreciation: Buildings

$ 100,000

another corporation. Management intends to hold the investment for at least 3 years. The remaining

Equipment

$ 110,000

$80,000 of this investment account is intended to be sold within the next year.

Accumulated Depreciation: Equipment

$ 60,000

6) Notes Payable consists of the following notes:

Patent (net)

$ 10,000

- A $50,000 note due in 6 years.

Accounts Payable

$ 75,000

- A $30,000 note due in 6 months.

Notes Payable

$ 130,000

- A $50,000 note due in 5 annual installments of $10,000; the next installment is due 2/15/2025.

Interest Payable

$ 20,000

Bonds Payable

$ 240,000

Common Stock

$ 300,000

Retained Earnings

$ 129,000

$ 1,054,000

$ 1,054,000

Required:

Prepare a classified Balance Sheet in good form for Burchette Industries.

[hint: use the Concept Review Exercise on page 119 as an example]