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The adjusted trial balance of Black and Blue Company and other related information for the year 2017 are presented: BLACK AND BLUE COMPANY ADJUSTED TRIAL

The adjusted trial balance of Black and Blue Company and other related information for the year 2017 are presented:

BLACK AND BLUE COMPANY

ADJUSTED TRIAL BALANCE

DECEMBER 31, 2017

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

Total $1,459,600 $1,459,600

Additional information:

1. The FIFO method of inventory value is used.

2. The cost and fair value of the long-term equity investments is the same.

3. 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.

4. The patents were purchased by the company at a cost of $100,000 and are being amortized on a straight-line basis.

5. Of the discount on bonds payable, $3,000 will be amortized in 2018.

6. The notes payable represent bank loans that are secured by long-term equity investments carried at $131,000. These bank loans are due in 2018.

7. The bonds payable bear interest at 6% payable every December 31, and are due January 1, 2028.

8. 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, 2017, so that all important information is fully disclosed.

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