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Prepare a classified balance sheet. Assume that $13,328 of the note payable will be paid in 2023. (List Current Assets in order of liquidity and Property, Plant and Equipment in order of Land, Buildings and Equipment.)

Exercise 2-05 These items are taken from the financial statements of Sandhill Co. at December 31, 2022. Buildings Accounts receivable Prepaid insurance Cash Equipment Land Insurance expense Depreciation expense Interest expense Common stock Retained earnings (January 1, 2022) Accumulated depreciation-buildings Accounts payable Notes payable Accumulated depreciation equipment Interest payable Service revenue $103,684 12,348 3,136 11,603 80,752 59,976 764 5,194 2,548 58,800 39,199 44,688 9,310 91,728 18,346 3,528 14,406

Answer 1

Sandhill Co.
Balance Sheet
As of December 31,2022
Assets		Liabilities and stockholders' equity
Current Assets:		Current liabilities:
Cash	$11,603	Accounts payable	$9,310
Accounts receivable	$12,348	Interest payable	$3,528
Prepaid insurance	$3,136	Notes payable	$13,328
Total current assets	$27,087	Total current liabilities	$26,166
		Long-term debt:
Property,plant,and equipment:		Notes payable	$78,400
Land	$59,976	Total liabilities	$104,566
Buildings	$103,684
Accumulated depreciation-Buildings	($44,688)	Stockholders' Equity:
Equipment	$80,752	Common stock	$58,800
Accumulated depreciation-equipment	($18,346)	Retained earnings*	$45,099
Total property,plant,and equipment	$181,378	Total stockholders' equity	$103,899
Total Assets	$208,465	Total liabilities and stockholders' equity	$208,465

*Calculations:

Income Statement
Service revenue		$14,406
Expenses:
Insurance expense	$764
Depreciation expense	$5,194
Interest expense	$2,548
Total Expenses		$8,506
Net income		$5,900

Retained earnings, Dec 31 2022 = Retained earnings, Jan 1, 2022 + Net income

= $39,199 + $5,900

= $45,099