Mabel’s Piano Tuning is a company that specializes in piano tuning and repair. Mabel’s Piano Tuning employs 11 specially trained piano tuners who will, upon request, drive to a client’s location and individually tune or repair each piano.

Presented below is the December 31, 2020 post-closing trial balance for Mabel’s Piano Tuning.

1. Prepare a classified balance sheet as of December 31, 2020 in good form like you would present it to a client (i.e. proper heading, dollar signs, underlining, no abbreviations).

2. Calculate working capital and the current ratio. (round the ratio to 2 places past the decimal)

Account Title

debit credit

Cash-
Accounts receivable 37,000 Debit
Allowance for doubtful accounts. 55,500 Debit
Inventories 10,235 Credit
Notes receivable 7,900 Debit
Prepaid insurance 11,900 Debit
Equipment 6,765 Debit
Accumulated depreciation – equipment 4,500 Debit
Vehicles
Accumulated depreciation – vehicles 100,000 Debit 550 Credit
Investments
Copyrights 33,000 Debit 27,000 Credit

Accounts payable 12,000 Debit
Interest payable
Unearned revenue 19,875 Credit
Taxes payable 950 Credit
Wages payable 1,200 Credit
Notes payable 8,000 Credit
Common stock 2,100 Credit
Additional paid-in capital in excess of par 22,000 Credit

Retained earnings 12,000 Credit

Treasury stock 11,000 Credit
Accumulated other comprehensive income(loss) 5,700 Debit 173,405 Credit

14,050

Total 288,315 288,315

Additional information:

1. The cash account includes the following items:

   • A commercial checking account at Andante Bank- 9,500

   • A certificate of deposit that matures in 30 days- 1,200

   • Overdraft balance in a commercial checking account at Allegro Bank- 50

   • A petty cash fund- 150

   • A money market fund with check writing privileges- 2,000

   • A certificate of deposit that matures in 180 days- 2,700

   • A separate cash fund restricted for the purchase of a vehicle in 2 years- 2,500

2. The investments account includes the following items:

   • Investments in bonds that mature February 15, 2021- 3,000

   • Investments in common stock that Mabel’s intends to hold several years- 24,000

   • Mabel’s purchased commercial paper in Arpeggio Inc. due in 29 days - 6,000

3. The equipment account contains $2,100 of assets which are held for speculation.

4. The notes payable account consists of the following separate notes:

   • A $2,000 note due in six months

   • A $8,000 note due in six years

   • A $12,000 note due in three equal annual installments beginning January 2, 2021

5. The common stock account represents 12,000 shares issued of $1 par value common stock. The company has 30,000 shares authorized and 10,000 shares are currently outstanding.

6. The treasury stock consists of 2,000 shares which are recorded at cost.

Answer rating: 100% (QA)

Q1 Mabels Piano Tuning Balance Sheet As on 31 December 2020 Liabilities Amount Amount Amount Assets Amount Amount Amount Current Liabilities Current A... View the full answer