Question

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 Credits Debits $ 31,000 68,000 93,000 $ 16,000 56,000 132.000 330.000 106,000 87.000 Account Title Cash Accounts receivable Inventory Interest payable Investment in equity securities Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation equipment Copyright (net) Prepaid expenses (next 12 months) Accounts payable Deferred revenue (next 12 months) Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals 31.000 18,000 38.000 71.000 26.000 280.000 6.000 260,000 57.000 $853,000 $853,000 Additional information: 1. The $132,000 balance in the land account consists of $106,000 for the cost of land where the plant and office buildings are located, The remaining $26,000 represents the cost of land being held for speculation 2. The $56,000 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 $112.000 note due in six months and a $168,000 note due in three annual installments of

Answer 1

VALLEY PUMP CORPORATION
Balance Sheet
At December 31, 2006
Assets
Current assets:
Cash		$    31,000
Marketable securities		$    28,000
Accounts receivable		$    68,000
Allowance for uncollectible accounts		$    (6,000)
Inventories		$    93,000
Prepaid expenses		$    38,000
Total current assets		$ 252,000
Investments:
Marketable securities	$      28,000
Land	$      26,000
Total investments		$    54,000
Property, plant, and equipment:
Land	$   106,000
Buildings	$   330,000
Equipment	$      87,000
	$   523,000
Less: Accumulated depreciation	$ (137,000)
Net property, plant, and equipment		$ 386,000
Intangibles:
Copyright		$    18,000
Total assets		$ 710,000
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable		$    71,000
Interest payable		$    16,000
Unearned revenues		$    26,000
Note payable		$ 112,000
Current maturities of long-term debt		$    56,000
Total current liabilities		$ 281,000
Long-term liabilities:
Note payable		$ 112,000
Shareholders’ equity:
Common stock	$   260,000
Retained earnings	$      57,000
Total shareholders’ equity		$ 317,000
Total liabilities and shareholders’ equity		$ 710,000