The adjusted trial balance for Summit's Bowling Alley Inc. at December 31, 1996, contains the following accounts.

\section*{Instructions}

(a) Prepare a classified balance sheet; assume that \(\$ 13,600\) of the mortgage payable will be paid in 1997.

(b) Comment on the liquidity of the company.

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Debits Credits Building $125,800 Common Stock $100,000 Accounts Receivable 14,520 Retained Earnings 10,000 Prepaid Insurance 4,680 Accumulated Depreciation-Building 45,600 Cash 20,840 Accounts Payable 13,480 Equipment 62,400 Mortgage Payable 93,600 Land 61,200 Accumulated Depreciation-Equipment 18,720 Insurance Expense 780 Interest Payable 2,600 Depreciation Expense 5,360 Bowling Revenues 14,180 Interest Expense 2,600 $298,180 $298,180