Solution:
In classified balance sheet, assets are represented first. Arrangement starts with most liquid to most long term nature of the asset. First you have to start with current assets. It includes all assets that will change its composition within a year. In this group most liquid one is cash in hand. Then will come short term investments. It can be converted into cash within a very short period. Next will be accounts receivable. It will be net figure after deducting non collectible portion. then you can consider all prepaid expenses. These expenses are related with next period and paid in advance. Finally you can consider inventory. It can be sold and converted into cash. But the process is not so easy. If it is sold then production can get disbursed. So practically it is difficult to sale.
Considering above sequencing of current assets, the group of current assets in classified balance sheet is shown below:
Accounts details Amount Amount
Current assets:
Cash and cash equivalent $830
Short term Investment $2,340
Accounts receivables $610
Less: Allowance for doubtful debts $10
Account receivables net of uncollectibles $600
Prepaid rent $270
Total current assets $4,050
