Question

The following items were taken from the financial statements of Pina Colada Company. (All amounts are in thousands.)Long-term debt $1,000 Accumulated depreciation—equipment $5,100 Prepaid insurance 750 Accounts payable 1,400 Equipment 11,800 Notes payable (due after 2020) 500 Stock investments (long-term) 300 Common stock 10,750 Debt investments (short-term) 3,500 Retained earnings 3,100 Notes payable (due in 2020) 400 Accounts receivable 2,200 Cash 2,200 Inventory 1,500 Prepare a classified balance sheet in good form as of December 31,2019.

Answer 1

Answer:

2019 Balance Sheet

$2,200,000 Cash

$2,200,000 Accounts Receivable

$750,000 Prepaid Insurance

$3,500,000 Debt Investment

$1,500,000 Inventory

$10,150,000  TOTAL CURRENT ASSETS  

$11,800,000 Equipment

-$5,100,000 Accum Depreciation

$300,000 Stock Investment

$7,000,000  TOTAL NONCURRENT ASSETS  

$17,150,000  TOTAL ASSETS  

$1,400,000  Accounts Payable  

$400,000  Notes Payable  

$1,800,000  TOTAL CURRENT LIABILITIES  

$500,000  Notes Payable  

$1,000,000  Long Term Debt  

$1,500,000  TOTAL NONCURRENT LIABILITIES  

$3,300,000  TOTAL LIABILITIES  

$10,750,000  Common Stock  

$3,100,000  Retained Earnings  

$13,850,000  TOTAL EQUITY  

$17,150,000  TOTAL EQUITY + LIABILITIES  

Explanation:

Account of Current Assets , the criteria is to have a liquidity speed less of one year

Cash

Accounts Receivable

Prepaid Insurance

Debt Investment

Inventory

Account of Non Current Assets , the criteria is to have a liquidity speed more than one year and are known as fixed assets

Equipment

Accum Depreciation

Stock Investment

Account of Current Liabilities , the criteria is to have a liquidity speed less of one year

Accounts Payable  

Notes Payable Short Term  

Account of Non Current Liabilities, the criteria is to have a liquidity speed more than one year and are known as long term financing

Notes Payable Long Term  

Long Term Debt  

Account of Total Equity

Common Stock  

Retained Earnings