Problem

Preparing a multi-step income statement and a classified balance sheet [30-40 min]Link Bac...

Preparing a multi-step income statement and a classified balance sheet [30-40 min]

Link Back to Chapter 4 (Classified Balance Sheet). The accounts of Taylor Electronics Company are listed along with their balances before closing for the month ended March 31, 2012.

Requirements

1. Prepare Taylor Electronics’ multi-step income statement.
2. Prepare Taylor Electronics’ statement of retained earnings.
3. Prepare Taylor Electronics’ classified balance sheet in report form.

The Classified Balance Sheet

So far we have presented the unclassified balance sheet of Smart Touch. We are now ready for the balance sheet that is actually used in practice—called a classified balance sheet. Exhibit presents Smart Touch classified balance sheet using the data from Exhibit. on page 205.

Smart Touch classifies each asset and each liability as either current or longterm. Notice that the Total assets of $75,500 is the same as the Total assets on the unclassified balance sheet in Exhibit.