Question

Adams Co. reports the following balance sheet accounts as of December 31. Salaries payable $ 6,500 Retained earnings $ 55,000 Buildings 63,000 Notes payable (due in 9 years) 40,000 Prepaid rent 7,500 Office supplies 3,000 Merchandise inventory 15,000 Land 32,000 Accounts payable 15,000 Accumulated depreciation-Building 6,000 Prepaid insurance 4,000 Mortgages payable (due in 5 years) 22,000 Accounts receivable 9,000 Cash 26,000 Common stock 15,000 Required: Prepare a classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

Answer is given below

Explanation:

given data

Salaries payable = $6,500

Retained earnings = $55,000

Buildings = 63,000

Payable = 40,000

Prepaid rent = 7,500

Office supplies = 3,000

Merchandise inventory = 15,000

Land = 32,000

Accounts payable = 15,000

Accumulated depreciation Building = 6,000

Prepaid insurance = 4,000

Mortgages payable = 22,000

Accounts receivable = 9,000

Cash = 26,000

Common stock = 15,000

solution

Current Assets  

Cash $26,000

Accounts Receivable $9,000

Merchandise inventory $15,800

Office Supplies $3,000

Prepaid Rent $7,500

Prepaid Insurance $4,000

Total Current Assets: $65,300

and

Property, Plant and Equipment

Buildings $63,000

Land $32,000

Accumulated Depreciation 6,000

Total PP&E =  $101,000

so  

Total Assets = $166,300

and

Liabilities

Current Liabilities

Salaries Payable $6,500

Accounts payable $15,000

Total Current Liabilities =  $21,500

and

Long-Term Liabilities

Notes Payable $40,000

Mortgages Payable $22,000

Total Long-Term Liabilities =  $62,000

so

Total Liabilities =  $83,500

and

Stockholders' Equity

Common Stock $15,000

Retained Earnings $55,000

Total Stockholders' Equity = $70,000  

Total Liabilities + Stockholders' Equity =  $83,500  + $70,000 = $153,500