Question

These items are taken from the financial statements of Windsor, Inc. at December 31, 2017.

Buildings
$97,336
Accounts receivable
11,592
Prepaid insurance
2,944
Cash
10,893
Equipment
75,808
Land
56,304
Insurance expense
718
Depreciation expense
4,876
Interest expense
2,392
Common stock
55,200
Retained earnings (January 1, 2017)
36,801
Accumulated depreciation—buildings
41,952
Accounts payable
8,740
Notes payable
86,112
Accumulated depreciation—equipment
17,222
Interest payable
3,312
Service revenue
13,524



Prepare a classified balance sheet. Assume that $12,512 of the note payable will be paid in 2018. (List current assets in order of liquidity and property plant and equipment in order of land, buildings and equipment.)

Answer 1

To make balance sheet we first have to calculate net income/net profit for the year.

Net profit Calculation

Service revenue $ 13,524

Insurance expense ($ 718 )

Depreciation expense ($ 4,876)

Interest expense ($ 2,392)

Profit $ 5,538

Balance Sheet

Asset

Non-Current Asset

Land $56,304

Buildings $97,336

Accumulated depreciation—buildings ($41,952)

Equipment $75,808

Accumulated depreciation—equipment ($17,222)

Total non Current Asset $170,274

Current Asset

Cash $10,893

Accounts receivable $11,592

Prepaid insurance $2,944

Current Asset $25,429

Total Asset $195,703

Equity

Common stock $55,200

Retain Earning (36,801+5,538) $42,339

Total Equity $97,539

Liability

Non-Current Liability

Current Liability

Accounts payable $8,740

Notes payable $86,112

Interest payable $3,312

Total Current Liability $98,164

Total Liability + Equity $195,703