Problem 5: Classified Balance Sheet (25 points) These items are taken from the f
ID: 2399578 • Letter: P
Question
Problem 5: Classified Balance Sheet (25 points) These items are taken from the financial statements of Donovan Co. at December 31, 2012. Building Accounts receivable Prepaid insurance Cash Equipment Land Insurance expense Depreciation expense Interest expense $95,800 7,600 4,680 18,840 79,400 61,200 780 7,300 2,600 57,000 40,000 45,600 7,500 88,600 18,720 3,600 17,180 Common stock Retained earnings January 1, 2012) Accumulated depreciation-building Accounts payable Mortgage payable Accumulated depreciation-equipment Interest payable Bowling revenues Instructions: Prepare a classified balance sheet. Assume that $13,600 of the mortgage payable will be paid in 2013. (HINT: not all of the above accounts will appear directly on the balance sheet), You may need the back of the previous page to have enough room for your answer.Explanation / Answer
DONOVAN COMPANY Balance Sheet December 31, 2012 Current assets Cash 18840 Accounts receivable 7600 Prepaid Insurance 4680 Total current assets 31120 Property, plant, and equipment Land 61200 Building 95800 Less: Accumulated depreciation— building 45600 50200 Equipment 79400 Less: Accumulated depreciation— equipment 18720 60680 172080 Total Assets 203200 Liabilities and Stockholders' Equity Current liabilities Accounts payable 7500 Current portion of note payable 13600 Interest payable 3600 Total current liabilities 24700 Long-term liabilities Mortgage payable 75000 Total liabilities 99700 Stockholders' equity Common stock 57000 Retained earnings 40,000 + $6,500* 46500 Total stockholders' equity 103500 Total liabilities and Stockholders' equity 203200 *Net income = $17,180 – $780 – $7,300 – $2,600 = $6,500