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VWX Enterprises Financial Overview as of September 30, 2025: Cash: $16,000 Accounts Receivable: $12,500 Inventory: $21,000 Prepaid Rent: $4,500 Office Equipment: $40,000 Accumulated Depreciation: $8,000
VWX Enterprises Financial Overview as of September 30, 2025:
- Cash: $16,000
- Accounts Receivable: $12,500
- Inventory: $21,000
- Prepaid Rent: $4,500
- Office Equipment: $40,000
- Accumulated Depreciation: $8,000
- Accounts Payable: $15,000
- Notes Payable: $10,000
- Common Stock: $30,000
- Retained Earnings: $35,000
Requirements:
- Prepare a classified balance sheet.
- Calculate the acid-test ratio.
- Analyze VWX Enterprises' liquidity.
- Prepare the adjusting journal entries for:
- Depreciation expense for the year: $4,000
- Rent expense for the year: $2,200
- Explain the role of prepaid expenses in financial statements.
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