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.

Short answer

The balance sheet of the company totals$4,407,220.

Step-by-step solution

Definition of Note Payable

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.

Classified Balance sheet

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