Question

Consider the following account balances of Evan McGruder, Inc., as of December 31, Year 3: Accounts Payable $ 114,340Retained Earnings 55,800Equipment 422,700Notes Payable, due Year 5 344,300 Common Stock 205,500Accounts Receivable 203,600Income Tax Payable 4,010Cash 97,650Required: Prepare a classified balance sheet at June 30, Year 3

Answer 1

YEAR 3 Balance Sheet

$97,650 Cash

$203,600 Accounts Receivable

$301,250 TOTAL CURRENT ASSETS

$422,700 Equipment

$422,700 TOTAL NONCURRENT ASSETS

$723,950 TOTAL ASSETS

$114,340 Accounts Payable

$4,010 Income Tax Payable

$118,350 TOTAL CURRENT LIABILITIES

$344,300 Notes Payable

$344,300 TOTAL NONCURRENT LIABILITIES

$462,650 TOTAL LIABILITIES

$55,800 Retained Earnings

$205,500 Common Stock

$261,300 TOTAL EQUITY

$723,950 TOTAL EQUITY + LIABILITIES

Step-by-step explanation:

Account of Current Assets , the criteria is to have a liquidity speed less than one year, which means it's possible to get cash from these accounts before a year period.

"Liquidity is defined as the speed of the assets that will be converted into cash, Assets that take less days to buy or sell are more liquid than others."