the following information is available for elwes company for the year ended december 31, 2021: accounts…
the following information is available for elwes company for the year ended december 31, 2021: accounts payable $3,800 accumulated depreciation - equipment 4,000 common stock 5,000 retained earnings 4,300 intangible assets 2,300 notes payable (due in 5 years) 5,000 accounts receivable 1,500 cash 2,800 short - term investments 1,000 equipment 8,800 long - term investments 5,700 use the above information to prepare a classified balance sheet for the year ended december 31, 2021. (list current assets in order of liquidity)
Answer
Explanation:
Step1: Identify current assets
Current assets are assets expected to be converted to cash or used up within one - year or the operating cycle, whichever is longer. Current Assets = Accounts Receivable + Cash+ Short - term Investments Current Assets = $1,500 + 2,800+1,000=$5,300$
Step2: Identify long - term assets
Long - term assets include intangible assets, equipment (net of accumulated depreciation), and long - term investments. Net Equipment = Equipment - Accumulated Depreciation - Equipment = $8,800 - 4,000=$4,800$ Long - term Assets = Intangible Assets+Net Equipment + Long - term Investments Long - term Assets = $2,300+4,800 + 5,700=$12,800$
Step3: Identify current liabilities
Accounts payable is a current liability as it is due within a short - term. Current Liabilities = Accounts Payable=$$3,800$
Step4: Identify long - term liabilities
Notes payable (due in 5 years) is a long - term liability. Long - term Liabilities = Notes Payable=$$5,000$
Step5: Calculate total liabilities
Total Liabilities = Current Liabilities+Long - term Liabilities Total Liabilities = $3,800 + 5,000=$8,800$
Step6: Calculate total stockholders' equity
Total Stockholders' Equity = Common Stock+Retained Earnings Total Stockholders' Equity = $5,000 + 4,300=$9,300$
Step7: Prepare the classified balance sheet
| Assets | Amount | Liabilities and Stockholders' Equity | Amount |
|---|---|---|---|
| Current Assets: | Current Liabilities: | ||
| Accounts Receivable | $1,500$ | Accounts Payable | $3,800$ |
| Cash | $2,800$ | ||
| Short - term Investments | $1,000$ | Long - term Liabilities: | |
| Total Current Assets | $5,300$ | Notes Payable | $5,000$ |
| Long - term Assets: | Total Liabilities | $8,800$ | |
| Intangible Assets | $2,300$ | Stockholders' Equity: | |
| Net Equipment | $4,800$ | Common Stock | $5,000$ |
| Long - term Investments | $5,700$ | Retained Earnings | $4,300$ |
| Total Long - term Assets | $12,800$ | Total Stockholders' Equity | $9,300$ |
| Total Assets | $18,100$ | Total Liabilities and Stockholders' Equity | $18,100$ |
Answer:
| Assets | Amount | Liabilities and Stockholders' Equity | Amount |
|---|---|---|---|
| Current Assets: | Current Liabilities: | ||
| Accounts Receivable | $1,500$ | Accounts Payable | $3,800$ |
| Cash | $2,800$ | ||
| Short - term Investments | $1,000$ | Long - term Liabilities: | |
| Total Current Assets | $5,300$ | Notes Payable | $5,000$ |
| Long - term Assets: | Total Liabilities | $8,800$ | |
| Intangible Assets | $2,300$ | Stockholders' Equity: | |
| Net Equipment | $4,800$ | Common Stock | $5,000$ |
| Long - term Investments | $5,700$ | Retained Earnings | $4,300$ |
| Total Long - term Assets | $12,800$ | Total Stockholders' Equity | $9,300$ |
| Total Assets | $18,100$ | Total Liabilities and Stockholders' Equity | $18,100$ |