Thursday, 7 May 2015

The following is a December 31, 2013, post-closing trial balance for the Valley Pump Corporation.

The following is a December 31, 2013, post-closing trial balance for the Valley Pump Corporation.

  Account Title Debits Credits
  Cash 25,000      
  Accounts receivable 56,000      
  Inventories 81,000      
  Interest payable     10,000  
  Marketable securities 44,000      
  Land 120,000      
  Buildings 300,000      
  Accumulated depreciation—buildings     100,000  
  Equipment 75,000      
  Accumulated depreciation—equipment     25,000  
  Copyright (net of amortization) 12,000      
  Prepaid expenses 32,000      
  Accounts payable     65,000  
  Unearned revenues     20,000  
  Notes payable     250,000  
  Allowance for uncollectible accounts     5,000  
  Common stock     200,000  
  Retained earnings     70,000  
  



         Totals 745,000   745,000  
  








   
Additional information:
1.
The $120,000 balance in the land account consists of $100,000 for the cost of land where the plant and office buildings are located. The remaining $20,000 represents the cost of land being held for speculation.
2.
The $44,000 in the marketable 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 $100,000 note due in six months and a $150,000 note due in three annual installments of $50,000 each, with the first payment due in August of 2014.
   
Required:
Prepare a classified balance sheet for the Valley Pump Corporation at December 31, 2013.

save image 

Explanation: