Question

Question 3: (5 marks) The balances on December 31, 2017 are available for Denver Company: Accounts payable $2,550 Accounts receivable 3,550 Accumulated depreciation 6,250 Retained earnings, December 31, 2017 Cash 2,300 Cost of goods sold 52,300 Depreciation expense 2,500 Dividends declared 8,800 Equipment 29,000 Income tax expense 10,700 Interest expense 1,150 Inventory 6,250 Long-term potes payable 11,500 Paid-in capital 4,450 Prepaid rent 350 Rent expense 4,000 Sales 118.600 Wage expense 31,900 Wages payable 3,000 Required Prepare a classified balance sheet at December 31, 2017

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