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Prepare the classified balance sheet in report form as of
DecemberDecember 3131, 20182018.Every balance sheet is prepared in a similar manner.bullet• Each asset account is listed separately and then totaled. Cash is typically always listed first.bullet• Liabilities are listed separately and then totaled. Liabilities that are to be paid first are listed first.bullet• The retained earnings balance is taken directly from the statement of retained earnings.bullet• The balance sheet must always balance. Assets = Liabilities + Stockholders' EquityIn a classified balance sheet, assets are shown in order of liquidity and liabilities are classified by the order in which they must be paid, either current (within one year) or long-term (more than one year). Liquidity measures how quickly and easily an account can be converted to cash (because cash is the mostliquid asset). Accounts Receivable are relatively liquid because receivables are collected quickly. Office Supplies are less liquid, and Buildings and Furniture are even less so because they take longer to convert to cash or to be used up.We are asked to prepare our classified balance sheet in report form. Report form lists the assets at the top and liabilities and stockholders' equity below. A balance sheet thatlists the assets on the left and the liabilities and the equity on the right is an arrangement known as the account form. Although either form is acceptable, the report form is more popular.Begin with the assets section of the statement and start by selecting the labels, accounts, and subtotals to be reported on the classified balance sheet. Remember that current assets are those that will be converted to cash, sold, or used up during the next 12 months, or within the business's operating cycle if the cycle is longer than a year. Cash, Accounts Receivable, Office Supplies, and Prepaid Insurance are examples of current assets. Long-term assets are all the assets that will not be converted to cash or used up within the business's operating cycle or one year, whichever is greater. Long-term assets are typically made up of three categories: long-term investments; property, plant, and equipment; and intangible assets. Go ahead and select the labels of the asset portion of the classified balance sheet.LOADING...(Click the icon to view the Balance Sheet columns of the worksheet completed in Requirement 5.)Save Accounting Table... +
Copy to Clipboard...+Wonder's Quality AutomotiveBalance SheetDecember 31, 2018AssetsCurrent Assets:CashAccounts ReceivableOffice SuppliesPrepaid InsuranceTotal Current AssetsProperty, Plant, and Equipment:EquipmentLess:Acc. Depr.—EquipmentLandTotal Property, Plant, and EquipmentTotal AssetsEnter each asset account's balance and calculate the necessary subtotal and total amounts to complete the asset portion of the classified balance sheet.LOADING...(Click the icon to view the Balance Sheet columns of the worksheet completed in Requirement 5.)Save Accounting Table... +Copy to Clipboard...+Wonder's Quality AutomotiveBalance Sheet