Answer:
Weismuller Publishing Company
A Classified Balance Sheet at December 31, 2018
Assets:
Current Assets:
Cash                                                $77,000
Accounts Receivable   172,000
less allowance             <u> 22,000</u>      150,000
Investments                                    152,000
Inventories                                      291,000
Prepaid Expenses                           <u> 94,000</u>         $764,000
Long-term Assets:
Prepaid Expenses                           66,000
Machinery & Equipment 332,000
less Accumulated Depr.  <u>116,000</u> 216,000       <u> $282,000</u>
Total Assets                                                      <u>$1,046,000</u>
Current Liabilities:
Accounts payable                        $66,000
Interest payable                             26,000
Deferred revenue                          86,000
Taxes payable                                36,000
Notes payable:
    Six months                 46,000
    One year                   <u>26,000
</u>    <u>72,000</u>          $286,000
Long-term Liabilities:
Notes payable:
    Two or more years              52,000
    Six years                              <u>106,000</u>              <u>$158,000</u>
Total Liabilities                                                   $444,000
Equity:
Authorized Common Stock, 700,000 shares
Issued Common Stock       $406,000
Retained Earnings                <u> 196,000</u>             <u>$602,000</u>
Total Liabilities + Equity                               <u>$1,046,000</u>
<u></u>
Explanation:
a) Prepaid Expenses are classified as follows:
Current Assets: $160,000 - $66,000 = $94,000
Long-Term Assets = $66,000 ($132,000/2)
Since a year's lease is due in the next year.
b) Investments are classified as current because they include treasury bills maturing on January 30, 2019, and marketable securities saleable next year.
c) Deferred Revenue is a current liability.
d) The classifications of notes payable are indicated in the balance sheet.