Question

Preparing a Classified Balance Sheet

Prepare a classified balance sheet given the following account balances on December 31, 2020. Next, compute working capital on that same date.

Note: Other than cash, list items in each balance sheet category in the order of the largest dollar amount to the smallest dollar amount.

cash 1,000

accounts receivable 30,000

inventory 1,250

franchise 17,500

prepaid insurance 600

common stock (no par, 10,000 shares issued and outstanding) 25,000

accounts payable 31,000

notes payable (long-term) 35,000

income taxes payable 1,100

retained earnings 22,900

interest payable 350

equipment, net 65,000

Answer 1

Balance Sheet as at December 31,2020
	Amount In $
Assets
Non Current Assets
Equipment(net)	65,000
Franchise	17,500
	82,500
Current Assets
Accounts Receivable	30,000
Inventory	1250
Prepaid Insurance	600
Cash	1000
	32,850
Total Assets	115,350
Liabilities and Stock Holder's Equity
Non Current Liabilities
Notes Payable	35,000
	35,000
Current Liabilities
Accounts Payable	31000
Income tax Payable	1100
Interest Payable	350
	32,450
Stock Holder's Equity
Common Stock (10,000 shares issued and outstanding)	25,000
Retained Earnings	22,900
	47,900
Total Liabilities and Stock Holder's Equity	115,350
Working Capital	(In $)
Current Assets	32,850
Less : Current Liabilities	-32,450
Working Capital	400