The following accounts are taken from the financial statements of Facebook Inc. at September 30, 2013. (Amounts are in millions.)
Accounts Payable……………………………….. $ 700
Cash……………………………………………... 3,100
Common Stock………………………………… 10,400
Equipment………………………………………. 2,700
Income Tax Expense……………………………… 300
Interest Expense……………………………………. 50
Notes Payable (long- term) ………………………. 900
Notes Payable (short- term) ………………………. 300
Prepaid Rent……………………………………. 1,100
Retained Earnings………………………………. 2,600
Service Revenue………………………………… 5,300
Short- term Investments………………………… 6,300
Software………………………………………… 1,700
Required:
1. Prepare a classified balance sheet at September 30, 2013.
2. Using the balance sheet, indicate whether the total assets of Facebook Inc. at the end of the year were financed primarily by liabilities or stockholders’ equity.
3. Were the current assets sufficient to cover the current liabilities at September 30, 2013? Show the ratio and calculations that indicate this.