Question

Preparing a Classified Balance Sheet

The following balances are from the post-closing trial balance of Armour Inc.

Cash. $9,600 debit

Acc. rec. 39,000. debit

Allowance for doubtful acc. 4,500. credit

inventory 54,000 debit

prepaid insurance 720 debit

short term investments 16,800 debit

equipment 60,000 debit

accumulated depreciation - equipment 12,000 credit

accumulated depreciation- buildings 4,500 credit

Goodwill 18,180 debit

accounts payable 27,000 credit

salaries payable 3,000 credit

interest payable 900 credit

income tax payable 5,400 credit

notes payable 8%, 5 years 150,000 credit

bonds payable, 7%, 10 years 9,000. credit

common stock 120,000 credit

retained earnings 42,000. credit

totals 378,300 debit. 378,300 credit

Required

a. Prepare a classified balance sheet for Armour Inc. as of December 31, 2020.

• Do not use negative signs with any of your answers.
• List current liabilities in the order of the largest dollar amount to the smallest dollar amount

b. Compute working capital on December 31, 2020.

Working capital $_____

Answer 1

Armour Inc.
Balance Sheet
As of December 31, 2020
Assets
Current Assets
Cash		9,600
Accounts Receivable	39,000
Less: Allowance for Doubtful Accounts	4,500	34,500
Inventory		54,000
Prepaid Insurance		720
Short-term Investments		16,800
Total Current Assets			115,620
Property, Plant, and Equipment
Equipment	60,000
Less: Accumulated Depreciation - Equipment	12,000	48,000
Building	180,000
Less: Accumulated Depreciation - Building	4,500	175,500
Total Property, Plant, and Equipment			223,500
Intangible Assets
Goodwill			18,180
Total Assets			357,300
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable		27,000
Salaries Payable		3,000
Interest Payable		900
Income Tax Payable		5,400
Total Current Liabilities		36,300
Long-term Liabilities
Notes Payable, 8%, 5 years		150,000
Bonds Payable, 7%, 10 years		9,000
Total Liabilities			195,300
Stockholders' Equity
Common Stock		120,000
Retained Earnings		42,000
Total Stockholders' Equity			162,000
Total Liabilities and Stockholders' Equity			357,300
Working capital	79,320
(Current Assets - Current Liabilities)