Question

The following items were taken from the financial statements of Buttercup Company. (All dollars are in thousands.) Mortgage payable $2,443 Accumulated depreciation $3,655 Prepaid insurance 880 Accounts payable 1,444 Property, plant, and equipment 11,500 Notes payable after 2022 1,200 Long-term investments 1,100 Common stock 5,000 Short-term investments 3,690 Retained earnings 8,480 Notes payable in 2022 1,000 Accounts receivable 1,696 Cash 2,600 Inventories 1,756

Prepare a classified balance sheet in good form as of December 31, 2015. (Enter amounts in thousands. List current assets in order of liquidity.)

Answer 1

Answer and Explanation:

The preparation of the classified balance sheet is presented below:

Buttercup Company

Balance Sheet

December 31, 2022

(in thousands)

Assets

Current Assets

Cash $2,600

Short-term investments $3,690

Accounts receivable $1,696

Inventories $1,756

Prepaid expenses $880

Total current assets $10,622

Long-term investments $1,100

Property, plant, and equipment

Property, plant, and equipment $11,500

Less: Accumulated depreciation -$3,655 $7,845

Total assets $19,567

Liabilities and Owner's Equity

Current liabilities

Notes payable in 2022 $1,000

Accounts payable $1,444

Total current liabilities $2,444

Long-term liabilities

Mortgage payable $2443

Notes payable (after 2022) $1,200

Total long-term liabilities $3,643

Total liabilities $6,087

Owner's equity

Owner’s capital $13,480 ($5,000 + $8,480)

Total liabilities and owner's equity $19,567