Question

Accounting Principles I (ACC 111) Completing the Accounting Cycle (Chapter 4) Homework Problems Problem 4-A Classified Balance Sheet 6,000 5,000 40,000 120,000 12,000 60,000 Accounts Payable Accounts Receivable Accumulated Depreciation - Building Building Cash Common Stock Land Mortgage Payable Prepaid Insurance Retained Earnings Salaries Payable Supplies Unearned Fees 64,000 2,000 15,000 3,000 1,000 2,000 Requirement: Using the above amounts prepare a classified balance sheet, for the Plum Company at December 31 of the current year, that includes the correct balance for Land.

Answer 1

PLUM COMPANY Balance sheet As on December 31
ASSETS
Cash	12000
Accounts receivable	5000
Supplies	1000
Prepaid insurance	2000
Total current asset		20000
Non current asset
Land (check working note)		50000
Building	120000
Less:Accumulated depreciation-Building	(40000)	80000
Total non current asset
Total asset		150000
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities
Accounts payable	6000
Salaries payable	3000
Unearned fees	2000
Total current liabilities		11000
Long term liabilities
Mortgage payable		64000
Total liabilities		75000
Stockholders equity
Common stock	60000
Retained earning	15000
Total stockholders equity		75000
Total liabilities and stockholders equity		150000

Note

Total asset =Total liabilities +total equity = 150000

Land =Total asset- current asset- Net cost of building

      = 150000-20000-80000

     = 50000