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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Cornerstone Exercise 3-26 Preparing a Balance Sheet

Refer to the information for Sparrow Company on the previous page.

Required:

prepare a classified balance sheet for Sparrow at December 31, 2019.

To determine

Concept Introduction:

Balance Sheet: The Balance sheet is a summary of Assets, Liabilities and equity accounts that reports the financial position of the business as on a specific date. Assets are further classifies into Current Assets, Long Term Investments, Plant Assets and Intangible assets. And Liabilities are further classified into Current Liabilities and Long term liabilities.

To Prepare:

The classified balance sheet as on Dec. 31, 2019.

Explanation

The Balance sheet is a summary of Assets, Liabilities and equity accounts that reports the financial position of the business as on a specific date. Assets are further classifies into Current Assets, Long Term Investments, Plant Assets and Intangible assets. And Liabilities are further classified into Current Liabilities and Long term liabilities. The classified balance sheet as on Dec. 31, 2019 is prepared as follows:

    Sparrow Company
    Classified Balance Sheet
    As on Dec. 31, 2019
    ASSETS
    Current Assets:
    Cash $3,150
    Accounts Receivables $5,650
    Prepaid Insurance $4,480 $ 13,280
    Property, Plant and Equipment:
    Equipment $ 42,000
    Less: Accumulated Depreciation $(24,000) $ 18,000

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