Question

The following items were taken from the financial statements of Garcia Company.

Mortgage payable $ 2,340 Accumulated depreciation 3,560 Prepaid expenses 980 Accounts payable 1,555 Property, plant, and equipment 11,500 Notes payable due after 2020 1,200 Long-term investments 1,300 Owner’s capital 14,026 Short-term investments 3,690 Accounts receivable 1,696 Notes payable due in 2020 1,000 Inventories 1,765 Cash 2,750

Instructions: Prepare a classified balance sheet in good form (with the proper three-line heading) as of December 31, 2019.

Answer 1

GARCIA COMPANY
Balance Sheet
December 31, 2019
(in thousands)
		Amount $
Assets
Current Assets
Cash	2750
Short-term investments	3690
Accounts receivable	1696
Inventories	1765
Prepaid expenses	980
Total current assets		10,881
Long-term investments		1,300
Property, plant, and equipment
Property, plant, and equipment	11500
Less: Accumulated depreciation	3560	7,940
Total assets		20,121
Liabilities and Owner's Equity
Current liabilities
Notes payable in 2020	1000
Accounts payable	1555
Total current liabilities		2555
Long-term liabilities
Mortgage payable	2340
Notes payable (after 2020)	1200
Total long-term liabilities		3,540
Total liabilities		6,095
Owner's equity
Owner’s capital		14,026
Total liabilities and owner's equity		20,121