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.
