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The following is a December 31, 2021, post-closing trial balance for Almway Corporation
The following is a December 31, 2021, post-closing trial balance for Almway Corporation.
| Account Title | Debits | Credits | |||||||
| Cash | $ | 65,000 | |||||||
| Investment in equity securities | 130,000 | ||||||||
| Accounts receivable | 70,000 | ||||||||
| Inventory | 210,000 | ||||||||
| Prepaid insurance (for the next 9 months) | 8,000 | ||||||||
| Land | 110,000 | ||||||||
| Buildings | 430,000 | ||||||||
| Accumulated depreciation—buildings | $ | 110,000 | |||||||
| Equipment | 120,000 | ||||||||
| Accumulated depreciation—equipment | 70,000 | ||||||||
| Patent (net) | 20,000 | ||||||||
| Accounts payable | 95,000 | ||||||||
| Notes payable | 160,000 | ||||||||
| Interest payable | 30,000 | ||||||||
| Bonds Payable | 250,000 | ||||||||
| Common stock | 330,000 | ||||||||
| Retained earnings | 118,000 | ||||||||
| Totals | $ | 1,163,000 | $ | 1,163,000 | |||||
Additional information:
- The investment in equity securities account includes an investment in common stock of another corporation of $40,000 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 $35,000 that the company has not used and is currently listed for sale.
- The cash account includes $25,000 restricted in a fund to pay bonds payable that mature in 2024 and $33,000 restricted in a three-month Treasury bill.
- The notes payable account consists of the following:
- a $40,000 note due in six months.
- a $60,000 note due in six years.
- a $60,000 note due in five annual installments of $12,000 each, with the next installment due February 15, 2022.
- The $70,000 balance in accounts receivable is net of an allowance for uncollectible accounts of $7,000.
- The common stock account represents 110,000 shares of no par value common stock issued and outstanding. The corporation has 500,000 shares authorized.
Required:
Prepare a classified balance sheet for the Almway Corporation at December 31, 2021. and explain
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