Sherwin-Williams, based in Cleveland, Ohio, manufactures a wide variety of paint and other coatings, which are marketed through its specialty stores and in other retail outlets. The company also manufactures paint for automobiles. The Automotive Division has had financial difficulty. During a recent year, five branch locations of the Automotive Division were closed, and new management was put in place for the branches remaining.
The following titles were shown on Sherwin-Williams’s balance sheet for that year.
Accounts payable Machinery and equipment
Accounts receivable, less allowance Other accruals
Accrued taxes Other capital
Buildings Other current assets
Cash and cash equivalents Other long-term liabilities
Common stock Postretirement obligations other than pensions
Employee compensation payable Retained earnings
Finished goods inventories Short-term investments
Intangibles and other assets Taxes payable
Land Work in process and raw materials inventories
Long-term debt
Instructions
(a) Organize the accounts in the general order in which they would have been presented in a classified balance sheet.
(b) When several of the branch locations of the Automotive Division were closed, what balance sheet accounts were most likely affected? Did the balance in those accounts decrease or increase?