P5-2
Question
EXCEL (Balance Sheet Preparation) Presented below are a number of balance sheet items for Montoya, Inc., for the current year, 2017.
Goodwill | \(125,000 | Accumulated depreciation - equipment | \)292,000 |
Payroll tax payable | 177,591 | Inventory | 239,800 |
Bond payable | 300,000 | Rent payable (short-term) | 45,000 |
Discount on bond payable | 15,000 | Income tax payable | 98,362 |
Cash | 360,000 | Rent payable (long-term) | 480,000 |
Land | 480,000 | Common stock, \(1 par value | 200,000 |
Notes receivable | 445,700 | Preferred stock, \)10 par value | 150,000 |
Note payable | 265,000 | Prepaid expenses | 87,920 |
Account payable | 490,000 | Equipment | 1,470,000 |
Retained earnings |
| Debt investment (trading) | 121,000 |
Income tax receivable | 97,630 | Accumulated depreciation – building | 270,200 |
Note payable (Long-term) | 1,600,000 | Buildings | 1,640,000 |
Instructions
Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term unless stated otherwise. The cost and fair value of equity investments (trading) are the same.
Step-by-Step Solution
VerifiedThe balance sheet of the company totals $4,407,220.
The liability of the business entity arising out of a written promise made by the business entity to repay the borrowed amount on a specified date along with interest is known as a note payable.
Particular | Amount $ | Amount $ |
Assets |
|
|
Current assets: |
|
|
Cash |
| $360,000 |
Prepaid expenses |
| 87,920 |
Inventory |
| 239,800 |
Note receivable |
| 445,700 |
Debt investment (trading) |
| 121,000 |
Total current assets |
| 1,254,420 |
|
|
|
Property, Plant and Equipment |
|
|
Land |
| 480,000 |
Building | $1,640,000 |
|
Less: Accumulated depreciation | (270,200) | 1,369,800 |
|
|
|
Equipment | 1,470,000 |
|
Less: Accumulated depreciation | (292,000) | 1,178,000 |
|
|
|
Intangible assets |
|
|
Goodwill |
| 125,000 |
Total assets |
| 4,407,220 |
|
|
|
Liabilities |
|
|
Current liabilities |
|
|
Account payable |
| 490,000 |
Income tax payable | 98,362 |
|
Less: Income tax receivable | (97,630) | 732 |
|
|
|
Rent payable |
| 45,000 |
Payroll tax payable |
| 177,591 |
Note payable |
| 265,000 |
Total current liabilities |
| 978,323 |
|
|
|
Non-Current liabilities |
|
|
Note payable (long-term) |
| 1,600,000 |
Bond payable | 300,000 |
|
Less: Discount on bond payable | (15,000) | 285,000 |
|
|
|
Rent Payable |
| 480,000 |
Total liabilities |
| 3,343,323 |
|
|
|
Stockholder equity |
|
|
Common shares authorized 400,000 shares |
| 200,000 |
Preferred shares authorized 20,000 shares |
| 150,000 |
Retained earnings |
| 713,897 |
Total liabilities and shareholder’s equity |
| $4,407,220 |