Question

These items are taken from the financial statements of Coronado Industries at December 31, 2017. Buildings $105,800 Accounts receivable 12,600 Prepaid insurance 3,200 Cash 11,840 Equipment 82,400 Land 61,200 Insurance expense 780 Depreciation expense 5,300 Interest expense 2,600 Common stock 60,000 Retained earnings (January 1, 2017) 40,000 Accumulated depreciation—buildings 45,600 Accounts payable 9,500 Notes payable 93,600 Accumulated depreciation—equipment 18,720 Interest payable 3,600 Service revenue 14,700 Prepare a classified balance sheet. Assume that $13,600 of the note payable will be paid in 2018.

Answer 1

Answer:

Assets:                                         Liabilities:

Current Assets                           Current Liabilities

Cash                            11,840          Accounts payable          9,500

Accounts receivable 12,600          Notes payable(current) 13,600

Prepaid insurance     3,200          Interest payable              3,600

Total current assets:  27,640          Total Current Liab         26,700

Fixed assets:                               Long-term Liabilities:

Buildings (net)       60,200           Note Payable:                80,000

Equipment (net)     63,680             Total Liabilities            106,700

Land                       61,200        Equity:

total fixed assets: 185,080              Common stock         60,000

                                                         RE                              46,020

                                                       Total Equity                106,020

Total Assets: 212,720‬                  Total Liab + E              212,720

Explanation:

for RE we need to calculate the net income

income:

Service revenue           14,700

Insurance expense         ( 780 )

Depreciation expense ( 5,300 )

Interest expense          ( 2,600 )

Net income:                    6,020

RE 40,000 + 6,020 = 46,020

for note payable we split the current and long term portion

93,600 - 13,600 = 80,000 long term debt

te rest is self-explanatory