Question

Required information

Business Sim Corp. (BSC) issued 1,000 common shares to Kelly in exchange for $10,000. BSC borrowed $31,000 from the bank, promising to repay it in two years. BSC paid $36,000 for computer equipment with check number 101 and signed a note for $3,000 due in six months. BSC received $500 of supplies purchased on account. BSC’s loan contains a clause (“covenant”) that requires BSC to maintain a ratio of current assets to current liabilities of at least 1.4.

Assuming BSC entered into no other activities during its first year ended September 30, prepare the company’s classified balance sheet. Include a balance of zero in Retained Earnings.

Required information Business Sim Corp. (BSC) issued 1,000 common shares to Kelly in exchange for $10,000. BSC borrowed $31,000 from the bank, promising to repay it in two years. BSC paid $36,000 for computer equipment with check number 101 and signed a note for $3,000 due in six months. BSC received $500 of supplies purchased on account. BSC's loan contains a clause ("covenant") that requires BSC to maintain a ratio of current assets to current liabilities of at least 1.4 Assuming BSC entered into no other activities during its first year ended September 30, prepare the company's classified balance sheet. Include a balance of zero in Retained Earnings. BUSINESS SIM CORP Balance Sheet At September 30 Assets Liabilities Current Assets Current Liabilities Cash Supplies Equipment Total Assets

Answer 1

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