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P3-3 (SA) The following is a dec 31 2016 post closing trial balance for almway c

ID: 2425504 • Letter: P

Question

P3-3 (SA)

The following is a dec 31 2016 post closing trial balance for almway corporation

account title     Debit                          Credit

Cash             45,000

investments 110,000

accounts rec. 60,000

inventories 200,000

prepaid ins. 9,000

land 90,000

buildings 420,000

accumulated dep.- buildings            100,000

equipment 110,000

accumulated dep.- equipment           60,000

patents (net of amortization) 10,000

accounts payable                                  75,000

notes payable                                       130,000

interest payable                                     20,000

bonds payable                                       240,000

common stock                                          300,000

retained earnings                                      129,000

totals Debits= 1,054,000              Credits=1,054,000

1. the investment account includes and investment in common stock of another corporation of 30,000 which mangment intends to hold for atleast 3 years the balance of these investments is inted to be sold in for sale

2. the land account includes land which cost 25,000 that the company had not used and is currently listed for sale.

3. the cash account includes 15,000 restricted in a fund to pay bonds payable that mature in 2019 and 23,000 restricted in a 3 month treasuery bill

4. the notes payable account consists of the following

a. a 30,000 note due in six months

b. a 50,000 note due in six months

c. a 50,000 note due in five annual installments of 10,000 each with the next installment due febuary 15 2017

5. the 60,000 balance in accounts recivable is net of an allowance for uncollectable accounts of 8,000

6. the common stock account represents 100,000 shares of no par value common stock issued and outstanding the corporation has 500,000 shares authorized

Explanation / Answer

Closing Trial Balance: Particulars Debit Credit Cash          7,000 Cash held for payment of Bonds        15,000 Cash held for Treasury Bills        23,000 Investments: Held for Sales        80,000 Investments in Other Corp        30,000 Accounts Receivable        68,000 Provision for Bad Debts written Off          8,000 Inventories      200,000 Prepaid Expenses          9,000 Land held for Sales        25,000 Assets: Land        65,000 Building      420,000 Equipment      110,000 Accumulated Depreciation on Equipment        60,000 Accumulated Depreciation on Building      100,000 Patents        10,000 Accounts Payable        75,000 Notes Payable: Due in Six Months        30,000 Due Over Six Months        50,000 Long term Notes Payable        50,000 Interest Payable        20,000 Bonds Payable      240,000 Common Stock      300,000 Retainde Earnings      129,000 1,062,000 1,062,000