The following accounts and account balances were listed in the accounting records of the Rigons Lighting Company
Question:
The following accounts and account balances were listed in the accounting records of the Rigons Lighting Company on December 31, 2000:
Salaries payable $ 1,100 Accounts receivable 11,300 Investment in government bonds (due 12/31/2004) 30,000 Accounts payable 7,700 Unearned revenue 1,000 Building (net) 37,000 Interest payable (due 9/1/2001) 200 Cash 6,100 Notes payable (due | 2/31/2002) 15,000 Store equipment (net) 14,000 Prepaid insurance 900 Office equipment (net) 9,600 Inventory 13,200 Notes receivable (due 12/31/2003) 8,000 P. Rigons, capital 84,300 Land 4,000 Mortgage payable (due 7/1/2002) 22,500 Office and store supplies 2,700 Marketable securities ; 2,000 Notes payable (due 9/1/2001) 7,000 Required: (1) Prepare a classified balance sheet for the Rigons Lighting Company on December 31, 2000.
(2) The Rigons Lighting Company is applying for a $2,000 short-term loan at a local bank. If you were the banker, would you grant a loan to the company?
Explain your decision using what you learned in this chapter about evaluating a company’s liquidity.
Step by Step Answer:
Accounting Information For Business Decisions
ISBN: 9780030224294
1st Edition
Authors: Billie Cunningham, Loren A. Nikolai, John Bazley