Question
STU Ltd. Year-End Balances as of March 31, 2025: Item Amount Cash $11,000 Accounts Receivable $14,000 Supplies $4,000 Prepaid Insurance $2,000 Machinery $45,000 Accumulated Depreciation
STU Ltd. Year-End Balances as of March 31, 2025:
Item | Amount |
Cash | $11,000 |
Accounts Receivable | $14,000 |
Supplies | $4,000 |
Prepaid Insurance | $2,000 |
Machinery | $45,000 |
Accumulated Depreciation | $7,000 |
Accounts Payable | $13,000 |
Wages Payable | $3,000 |
Common Stock | $27,000 |
Retained Earnings | $25,000 |
Requirements:
- Prepare a classified balance sheet.
- Determine the current ratio and working capital.
- Assess the financial health of STU Ltd.
- Record the adjusting entries for:
- Depreciation expense for the year: $3,500
- Supplies expense for the year: $1,500
- Discuss why adjusting entries are important for accurate financial reporting.
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Financial Accounting and Reporting
Authors: Barry Elliott, Jamie Elliott
14th Edition
978-0273744535, 273744445, 273744534, 978-0273744443
