Question

Terracotta Incorporated reported the following accounts and amounts (in millions) in its financial statements for the year ended December 2, 2016. $ 890 980 550 1,180 Accounts Payable Accounts Receivable Accumulated Amortization Accumulated Depreciation Allowance for Doubtful Accounts Cash and Cash Equivalents Common Stock Deferred Revenue Equipment Income Taxes Payable Notes Payable (long-term) Notes Receivable (long-term) Prepaid Rent Retained Earnings Service Revenue Short-Term Investments Software 1,080 520 1,080 8,030 3,170 300 320 7,670 540 4,450 900 Prepare a classified balance sheet. The Allowance for Doubtful Accounts relates entirely to Accounts Receivable. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) TERRACOTTA, INC. Balance Sheet As of December 2, 2016 (in millions of dollars) Accounts Receivable, net of Allowance Equipment, net of Accumulated Depreciation Software, net of Accumulated Amortization |

Answer 1

B Terracota Inc. Balance Sheet December 02, 2016 4 Asets 5 Current Assets 6 Cash and Cash Equivalents 7 Short-term investments 8 Accounts Receivable 9 Allowance for Doubful Accounts 10 Accounts Receivable, Net of Allowance 11 Prepaid Rent 12 Total Current Assets 1080 4450 980 -80 9001 320 6750 13 8030 -1180 68501 14 Non-Current Assets 15 Equipment 16 Less: Acc. Dep. 17 Equipment net of Acc. Dep. 18 Software 19 Less: Acc. Amortization 20 Software net of Acc. Amortization 21 Notes Receivable 22 Total Non-Current Assets 960 -550 4101 300 7560 23 Total assets 14310

890 1980 801 29501 24 25 Liabilities and Shareholder's Equity 26 Liabilities 27 Current Liabilities 28 Accounts Payable 29 Deferred Revenue 30 Income Tax Payable 31 Total Current Liabilities 32 33 Non-Current Liabilities 34 Notes Payable 35 Total Non-Current Liabilities 36 Total Liabilities 37 38 Shareholder's Equity 39 Capital Stock 40 Retained Eranings 41 Total Shareholder's Equity 3170 3170 6120 5201 76701 81901 14310 42 Total Liabilities and Shareholder's Equity 43

B Terracota Inc. Balance Sheet December 02, 2016 4 Asets 5 Current Assets 6 Cash and Cash Equivalents 7 Short-term investments 8 Accounts Receivable 980 9 Allowance for Doubful Accounts -80 1080 4450 =B8+B9 320 1=C11+C10+C7+C6 10 Accounts Receivable, Net of Allowance 11 Prepaid Rent 12 Total Current Assets 13 14 Non-Current Assets 15 Equipment 8030 16 Less: Acc. Dep. -1180 17 Equipment net of Acc. Dep. 18 Software 1960 19 Less: Acc. Amortization -550 20 Software net of Acc. Amortization 21 Notes Receivable 22 Total Non-Current Assets =B15+B16 =B18+B19 300 =C21+C20+C17 23 Total assets =C22+C12

890 1980 80 =C28+C29+C30 24 25 Liabilities and Shareholder's Equity 26 Liabilities 27 Current Liabilities 28 Accounts Payable 29 Deferred Revenue 30 Income Tax Payable 31 Total Current Liabilities 32 33 Non-Current Liabilities 34 Notes Payable 35 Total Non-Current Liabilities 36 Total Liabilities 37 38 Shareholder's Equity 39 Capital Stock 40 Retained Eranings 41 Total Shareholder's Equity 3170 =C34 =C35+C31 520 7670 =C40+C39 =C41+C36 42 Total Liabilities and Shareholder's Equity 43 44