Colombia Textiles began operations several years ago. Its post-closing trial balance at December 31, 2014, is shown below (with accounts listed in alphabetical order):
Account Account Balance's $000s
Accounts payable 17
Accounts receivable 106
Accumulated depreciation, office furniture 38
Accumulated depreciation, store fixtures 61
Brandy Colombia, capital 308
Cash 48
Franchise 62
Merchandise inventory 236
Notes payable3 225
Notes receivable4 14
Office furniture 52
Office supplies 5
Prepaid rent 32
Store fixtures 106
Unearned sales 12
1. Assume all accounts have a normal balance.
2. The owner, Brandy Colombia, made no investments during 2014.
3. $180,000 of the note is due alter December 31, 2015.
4. $3,000 of the notes receivable will be collected during 2015.
Additional information:
The following closing entries were recorded on December 31, 2014, for the year just ended.
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Required
Using the information provided, prepare a single-step income statement, statement of changes in equity, and classified balance sheet.
Analysis Component:
Refer to Danier Leather's June 25, 2011, balance sheet in Appendix II at the back of the textbook. Compare Danier's liabilities to those of Colombia Textiles. Ignoring the balance sheet dates, which company has the stronger balance sheet? (A balance sheet is considered to be stronger the fewer liabilities it has as a percentage of total assets.)