Question

Selected accounts from Bennett Company's adjusted trial balance for the year ended December 31 follow Prepaid rent Accounts receivable Cash A. Bennett, Capital 2,300 Accounts payable 16,500 Allowance for doubtful accounts 25,000 Notes payable (due in years ) 33,700 Notes receivable (due in 4 years) 3,800 900 8,700 3,300 Prepare a classified balance sheet. Note: Allowance for doubtful accounts is subtracted from accounts receivable on the company's balance sheet

Answer 1

The classified Balance Sheet for Bennett Company at December 31, is as follows:

Bennett Company

Classified Balance Sheet

December 31

Assets

Current Assets:

Cash $25,000

Accounts Receivable, net 15,600

Prepaid Rent 2,300

Total Current Assets $42,900

Long-term Investments:

Notes Receivable (4 years) $3,300

Total Assets $46,200

Liabilities

Current Liabilities:

Accounts Payable $3,800

Long-term Liabilities:

Notes Payable (in 10 years) $8,700

Total liabilities $12,500

Equity:

Capital, A. Bennett $33,700

Total liabilities and equity $46,200

Accounts Receivable, net = $15,600 ($16,500 - $900)

The net of the Accounts Receivable is the difference between the book value and the allowance for doubtful accounts.

Thus, the classified balance sheet shows the assets under current and long-term assets, the liabilities under current and long-term liabilities, and the equity, separately.