Prepare a classified balance sheet; assume that $15,000 of the note payable will be paid in 2018. (b) Comment on the liquidity of the company. E4-15B The following are the major balance sheet classifications. Current assets (CA) Current liabilities (CL) Long-term investments (LTI) Long-term liabilities (LTL) Property, plant, and equipment (PPE) Owner’s equity (OE) Intangible assets (IA) Instructions Classify each of the following accounts taken from Garza Company’s balance sheet. ______ Accounts payable ______ Accumulated depreciation—equipment ______ Accounts receivable ______ Buildings. ______ Cash ______ Land ______ Owner’s capital ______ Notes payable (due in 3 years) ______ Salaries and wages payable ______ Supplies ______ Trademarks ______ Prepaid insurance ______ Stock Investments ______ Equipment ______ Inventory E4-16B The following items were taken from the financial statements of Foyle Company. (All dollars are in thousands.) Long-term debt $1,560 Accumulated depr.—equipment $4,000 Prepaid insurance 620 Accounts payable 1,010 Equipment 8,100 Notes payable (due after 2018) 250 Stock investments (long-term) 185 Owner’s capital 8,925 Debt investments (short-term) 2,500 Accounts receivable 1,500 Notes payable (due in 2018) 340 Inventory 880 Cash 2,300 Instructions Prepare a classified balance sheet in good form as of December 31, 2017. E4-17B These financial statement items are for Herrera Company at year-end, July 31, 2017. Salaries and wages payable $ 1,800 Notes payable (long-term) $ 2,000 Salaries and wages expense 39,000 Cash 13,300 Utilities expense 3,600 Accounts receivable 21,200 Equipment 26,500 Accumulated depr.—equip. 5,400 Accounts payable 3,600 Owner’s drawings 3,600 Service revenue 58,000 Depreciation expense 16,200 Rent revenue 7,600 Owner’s capital (beginning 45,000 of the year) Classify accounts on balance sheet. (LO 4) Prepare a classified balance sheet. (LO 4) Prepare financial statements. (LO 1, 4)
6 4 Completing the Accounting Cycle Instructions (a) Prepare an income statement and an owner’s equity statement for the year. The owner did not make any new investments during the year. (b) Prepare a classified balance sheet at July 31. *E4-18B Kerr Company pays salaries of $25,000 every Monday for the preceding 5-day week (Monday through Friday). Assume December 31 falls on a Wednesday, so Kerr’s employees have worked 3 days without being paid. Instructions (a) Assume the company does not use reversing entries. Prepare the December 31 adjust- ing entry and the entry on Monday, January 5, when Kerr pays the payroll. (b) Assume the company does use reversing entries. Prepare the December 31 adjusting entry, the January 1 reversing entry, and the entry on Monday, January 5, when Kerr pays the payroll. *E4-19B On December 31, the adjusted trial balance of Sele Employment Agency shows the following selected data.