Question

he December 31, 2014, post-closing trial balance for O&A Company below: po Credits Cash Investments Accounts receivable Prepaid insurance Inventories Marketable securities Land Building historical cost Building.net Copyright Accounts payable Unewned Revenue Notes payable, due in 5 years Interest payable Bonds payable, due 2023 Ordinary share capital, Retained earnings Debite 42,500 70,000 27,500 4,500 35,000 115.000 192.500 200.000 45.000 50.000 37,500 80,000 270,000 10,000 35.000 85.000 64,500 Additional Information: 1. The $192,500 balance in land account consists of 100,000 for the cost of land where the offices are located. The remaining 92,500 represents the cost of land being held for investment. 2. The $ 115,000 in the Marketable securities account consists of Treasury bills amount of $30,000, which matures in 2015. 3. The account of unearned revenue consists of $55,000 will be earned in 2015. Required: 1. Prepare classified statement of financial position for O&A Company and show the year-end balance in retained camnings, Attach File Browse My Computer Browse Content Collection

Answer 1

Date Page Ang) 04 A Company Classified Balance sheet. O&A Company Statement of Balance sheet (for the year ended December 31,2014) ASSETS Cwerent Assels o Cash Investment Marketable securities (including Treasury bille) Inventories Accounti Receivable Prepaid Insurance Total Current Assets 42.500 70,000 115,000 35,000 27,500 4,500 294,500 Non - Current Assets Land (including investment Building - Net Lopyright Total Non - current Assets 192,500 45,000 50,000 287,500 Total Assets 582,000 LIABILITIES AND STOCKCHOLDERS' EQUITY Current liabilities & Accounts Payable Unearned Revenue Interest Payable Totol current liabilities 37,500 80,000 10,000 127,500

Non- current liabilities o Notes Payable Interest Pay- Non- cwment Liabilities Alotes Payable (long-term) Bonds Payable (long-term) Total Nou-current liabilities 270,000 35,000 305,000 Total liabilities 432,500 EQUITY STOCKHOLDERS! Common share Capital 85,000 Retained Earnings 64,500 Total Stockholders' Equity 149500 Total liabilities and Stockholders' Equity 582,000 The year - End December 31, 2014 Retained Earning is is 64,500 but when the Unearned Revenue is earned in 2015 then this Earned Referred Revenue and it increases the Amount of Revenue and so Net Income decreases and the Retained decreases Earnings also less : Revenue Retained Earnings Retained Earnings Balance 80,000 64,500 Aus 15,500