Question

Form a Classified Balance Sheet

ABC Corporation
Adjusted Trial Balance
December 31, 2016
	Debit	Credit
Cash	$          834,544
Accounts Receivable	442,120
Allowance for doubtful accounts		75,000
Inventory	70,000
Allowance to Reduce Inventory to NRV		16,000
Prepaid Insurance	4,500
Land	88,000
Building	37,500
Accumulated depreciation: building		1,265
Equipment	21,600
Accumulated depreciation: equipment		9,900
Patent	45,000
Accounts Payable		88,851
Interest Payable		35,000
Income taxes payable		37,221
Wages payable		4,000
Unearned rent revenue		9,000
Bonds payable		700,000
Premium on Bonds payable		52,045
Common stock		135,000
PIC in Excess of Par- Common Stock		130,000
Paid in Capital- Treasury Stock		6,000
Retained earnings
Treasury stock	10,000
Dividends	28,000
Sales Revenue		790,000
Rent Revenue		4,500
Purchases	177,000
Wages expense	66,150
Bad debt expense	75,000
Office expense	28,500
Insurance expense	22,500
Advertising expense	9,240
Depreciation expense	11,165
Interest expense	31,171
Loss on inventory	16,000
Utilities expense	33,571
Impairment loss expense	5,000
Income taxes expense	37,221
Total	2,093,782	2,093,782

Answer 1

• All working forms part of the answer
• Firstly, balance of Income Summary (net income) to be transferred to retained earnings is to be found

Revenues :
Sales Revenue	$    7,90,000.00
Rent Revenue	$          4,500.00
Total	$    7,94,500.00
Expenses:
Purchases	$    1,77,000.00
Wages expense	$        66,150.00
Bad debt expense	$        75,000.00
Office expense	$        28,500.00
Insurance expense	$        22,500.00
Advertising expense	$          9,240.00
Depreciation expense	$        11,165.00
Interest expense	$        31,171.00
Loss on inventory	$        16,000.00
Utilities expense	$        33,571.00
Impairment loss expense	$          5,000.00
Income taxes expense	$        37,221.00
Expenses total	$    5,12,518.00
Net Income transferred to retained Earnings	$    2,81,982.00

• Classified Balance Sheet as asked

ASSETS
Current Assets:
Cash		$    8,34,544.00
Accounts receivables	$     4,42,120.00
(-) Allowances	$        75,000.00	$    3,67,120.00
Inventory	$        70,000.00
(-) Allowances to reduction	$        16,000.00	$        54,000.00
Prepaid Insurance		$          4,500.00
Total Current Assets		$ 12,60,164.00
Plant, Property & Equipment:
Land		$        88,000.00
Building	$        37,500.00
Accumulated depreciation: building	$        (1,265.00)	$        36,235.00
Equipment	$        21,600.00
Accumulated depreciation: equipment	$        (9,900.00)	$        11,700.00
Total PPE		$    1,35,935.00
Intangibles:
Patent		$        45,000.00
TOTAL ASSETS		$ 14,41,099.00
LIABILITIES & EQUITY
Current Liabilities:
Accounts Payable	$        88,851.00
Interest Payable	$        35,000.00
Income taxes payable	$        37,221.00
Wages payable	$           4,000.00
Unearned rent revenue	$           9,000.00
Total Current Liabilities		$    1,74,072.00
Long Term Liabilities:
Bonds payable	$     7,00,000.00
Premium on Bonds payable	$        52,045.00
Total Long Term Liabilities		$    7,52,045.00
Stockholder's Equity:
Common stock	$     1,35,000.00
PIC in Excess of Par- Common Stock	$     1,30,000.00
Paid in Capital- Treasury Stock	$           6,000.00
Retained earnings [281982 (-) 28000 dividends]	$     2,53,982.00
Total		$    5,24,982.00
Less: Treasury Stock		$        10,000.00
Total Stockholder's Equity		$    5,14,982.00
Total Liabilities & Stockholder's Equity		$ 14,41,099.00