Classified Balance Sheet

Jerrison Company operates a wholesale hardware business. The following balance sheet accounts and balances are available for Jerrison at December $31.$

Accounts payable $ $65,100$ Equipment, data processing $$309,000$

Accounts receivable $95,500$ Income taxes payable $25,600$

Accumulated depreciation Interest payable $12,600$

$($on building$)216,800$ Inventory $187,900$

Accumulated depreciation Investments $($long$-$term$)32,700$

$($on data processing equipment$)172,400$ Investments $($short$-$term$)21,000$

Accumulated depreciation $31,200$ Land $41,000$

$($on trucks$)$ Notes payable $($due in $6$ months$)160,000$

Bonds payable $($due in $4$ years$)200,000$ Prepaid insurance $($for $4$ months$)5,700$

Building $($warehouse$)419,900$ Retained earnings, Dec. $31?$

Cash $11,400$ Salaries payable $14,400$

Common stock $150,000$ Trucks $106,100$

Required:

Question Content Area

$1.$ Prepare a classified balance sheet for Jerrison at December $31.$

Jerrison Company

Balance Sheet

December $31$

Assets

Current assets:

Cash

$Cash

$11,400$

Investments $($short$-$term$)$

Investments $($short$-$term$)$

$21,000$

Accounts receivable

Accounts receivable

$95,500$

Prepaid insurance

Prepaid insurance

$5,700$

Inventory

Inventory

$187,900$

Total current assets $fill in the blank baf$2$fa$031057$fbb$\_11$

$321,500$

Long$-$term investments:

Investment

Investment

$32,700$

Property, plant, and equipment:

Land

$Land

$41,000$

Building

$Building

$419,900$

Less: Accumulated depreciation

Less: Accumulated depreciation

$216,800$

Building, net fill in the blank baf$2$fa$031057$fbb$\_20$

$203,100$

Trucks

$Trucks

$106,100$

Less: Accumulated depreciation

Less: Accumulated depreciation

$31,200$

Trucks, net fill in the blank baf$2$fa$031057$fbb$\_25$

$74,900$

Equipment $($data processing$)$

$Equipment $($data processing$)$

$309,000$

Less: Accumulated depreciation

Less: Accumulated depreciation

$172,400$

Equipment, net fill in the blank baf$2$fa$031057$fbb$\_30$

$136,600$

Total property, plant, and equipment fill in the blank baf$2$fa$031057$fbb$\_31$

$455,600$

Total assets $fill in the blank baf$2$fa$031057$fbb$\_32$

$809,800$

Liabilities

Current liabilities:

Accounts payable

$Accounts payable

$65,100$

Notes payable

Notes payable

$160,000$

Salaries payable

Salaries payable

$14,400$

Interest payable

Interest payable

$12,600$

Income taxes payable

Income taxes payable

$25,600$

Total current liabilities $fill in the blank baf$2$fa$031057$fbb$\_43$

$277,700$

Long$-$term liabilities:

Bonds payable

Bonds payable

$200,000$

Total liabilities $fill in the blank baf$2$fa$031057$fbb$\_46$

$477,700$

Stockholders' Equity

Common stock

$Common stock

$150,000$

Retained earnings

Retained earnings

Total stockholders' equity fill in the blank baf$2$fa$031057$fbb$\_51$

Total liabilities and stockholders' equity $fill in the blank baf$2$fa$031057$fbb$\_52$

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$1.$ Prepare a balance sheet with proper form and using the proper heading. List assets first using the proper classifications, in order of liquidity, and total. List liabilities using the proper classifications and total. List stockholders' equity using proper classifications and total. To determine retained earnings, first use the concepts in the fundamental accounting equation to determine stockholders' equity. Next, determine retained earnings based on the stockholders' equity amount you computed.

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$2.$ Compute Jerrison$$s working capital and current ratio at December $31.$ Round the current ratio answer to two decimal places.

Working Capital $fill in the blank c$7$c$759$f$93$fa$5$fea$\_1$

Current Ratio fill in the blank c$7$c$759$f$93$fa$5$fea$\_2$

$3.$ Conceptual Connection: If Jerrison's management is concerned that a large portion of its inventory is obsolete and cannot be sold, how will Jerrison's liquidity be affected?

If a large portion of inventory cannot be sold, Jerrison will

most likely not generate

sufficient cash flow to pay its obligations as they become due.

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