Question

Question 3:(5 marks) The balances on December 31, 2017 are available for Denver Company: $2,550 Accounts payable 3,550 Accounts receivable 6,250 Accumulated depreciation Retained earnings, December 31, 2017 2,300 Cash $2.300 Cost of goods sold 2,500 Depreciation expense 8,800 Dividends declared 29,000 Equipment 10,700 Income tax expense 1,150 Interest expense 6,250 Inventory 11,500 Long-term notes payable Paid-in capital 4,450 Prepaid rent 350 Rent expense 4,000 Sales 118,600 31900 Wage expense Wages payable 3,000 Required Prepare a classified balance sheet at December 31, 2017 Page 6 of 9

Answer 1

Denver Company Balance Sheet December 31, 2017
Assets
Current Assets	$	$
Cash	2,300
Accounts Receivable	3,550
Inventory	6,250
Prepaid Rent	350
Total Current Assets		12,450
Property Plant and Equipment
Equipment, at cost	29,000
Accumulated Depreciation	(6,250 )	22,750
Total Assets		$ 35,200
Liabilities and Owners' Equity
Liabilities
Current Liabilities
Accounts Payable	2,550
Wages Payable	3,000
Dividends Declared	8,800
Total Current Liabilities		14,350
Long Term Liabilities
Long Term Notes Payable		11,500
Total Liabilities		25,850
Owners' Equity
Paid-in Capital	4,450
Retained Earnings	4,900
Total Owners' Equity		9,350
Total Liabilities and Owners' Equity		$ 35,200