Colombia Textiles began operations several years ago. Its post-closing trial balance at December 31, 2020, is shown

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Colombia Textiles began operations several years ago. Its post-closing trial balance at December 31, 2020, is shown below (with accounts listed in alphabetical order):

Account ................................................................................ Account Balance1 ($000s)Accounts payable ...................................................................................................... 34Accounts receivable ................................................................................................ 106Accumulated depreciation, office furniture ........................................................... 38Accumulated depreciation, store fixtures............................................................... 61Brandy Colombia, capital2 ..................................................................................... 291Cash ............................................................................................................................ 48Franchise .................................................................................................................... 62Merchandise inventory .......................................................................................... 236Notes payable3 ....................................................................................................... 225Notes receivable4 ..................................................................................................... 14Office furniture ......................................................................................................... 52Office supplies ............................................................................................................ 5Prepaid rent .............................................................................................................. 32Store fixtures .......................................................................................................... 106Unearned revenue.................................................................................................... 12

Additional information: The following closing entries were recorded on December 31, 2020, 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 Spin Master?s December 31, 2017, balance sheet in Appendix III at the back of the textbook. Compare Spin Master?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.)

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Fundamental Accounting Principles Volume I

ISBN: 978-1260305821

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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