Question & Answer: The following is a December 31, 2018, post-closing trial balance for Almway Corporation…..

The following is a December 31, 2018, post-closing trial balance for Almway Corporation.

Account Title Debits Credits
Cash 45,000
Investments 110,000
Accounts receivable 60,000
Inventories 200,000
Prepaid insurance (for the next 9 months) 9,000
Land 90,000
Buildings 420,000
Accumulated depreciation—buildings 100,000
Equipment 110,000
Accumulated depreciation—equipment 60,000
Patents (net of amortization) 10,000
Accounts payable 75,000
Notes payable 130,000
Interest payable 20,000
Bonds Payable 240,000
Common stock 300,000
Retained earnings 129,000
Totals 1,054,000 1,054,000

Additional information:

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Question & Answer: The following is a December 31, 2018, post-closing trial balance for Almway Corporation…..
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The investment account includes an investment in common stock of another corporation of $30,000 which management intends to hold for at least three years. The balance of these investments is intended to be sold in the coming year.

The land account includes land which cost $25,000 that the company has not used and is currently listed for sale.

The cash account includes $15,000 restricted in a fund to pay bonds payable that mature in 2021 and $23,000 restricted in a three-month Treasury bill.

The notes payable account consists of the following:

A) a $30,000 note due in six months.

B) a $50,000 note due in six years.

C) a $50,000 note due in five annual installments of $10,000 each, with the next installment due February 15, 2019.

The $60,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $8,000.

The common stock account represents 100,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 shares authorized.

Prepare a classified balance sheet for the Almway Corporation at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

Expert Answer


Balance sheet
Current assets
Cash 30000
Short term investment 80000
Accounts receivable net of allowance 60000
Inventories 200000
Prepaid insurance 9000
Total current assets 379000
Marketable securities 30000
Land held for sale 25000
Restricted cash 15000
Total investment 70000
Plant property and equipment
Land 65000
Building 420000
Accumulated depreciation building -100000
Equipment 110000
Accumulated depreciation equipment -60000
Net property plant and equipment 435000
Intangible assets
Patents 10000
Total assets 894000
Liabilities and stockholders equity
Current liability
Accounts payable 75000
Interest payable 20000
Notes payable 30000
Current maturities of long term debt 10000
Total current liabilities 135000
Long term liabilities
Notes payable 90000
Bonds payable 240000
Total long term liabilities 330000
Shareholdres equity
Authorized 500000 shares
Issued and outstanding shares 300000
Retained earings 129000
Total shareholders equity 429000
Total liabilities and shareholders equity 894000

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