Concept explainers
Balance sheet preparation
• LO3–2, LO3–3
The following is the balance sheet of Korver Supply Company at December 31, 2017.
KORVER SUPPLY COMPANY
Balance Sheet
At December 31, 2 017
Assets
Cash | $120,000 |
Accounts receivable | 300,000 |
Inventories | 200,000 |
Furniture and fixtures, net | 150,000 |
Total assets | $770,000 |
Liabilities and Shareholders’ Equity
Accounts payable (for merchandise) | $190,000 |
Note payable | 200,000 |
Interest payable | 6,000 |
Common stock | 100,000 |
274,000 | |
Total liabilities and shareholders’ equity | $770,000 |
Transactions during 2018 were as follows:
1. Sales to customers on account $800,000
2. Cash collected from customers 780,000
3. Purchase of merchandise on account 550,000
4. Cash payment to suppliers 560,000
5. Cost of merchandise sold 500,000
6. Cash paid for operating expenses 160,000
7. Cash paid for interest on note 12,000
The note payable is dated June 30, 2017 and is due on June 30, 2019. Interest at 6% is payable annually on June 30.
Required:
Prepare a classified balance sheet at December 31, 2018 (ignore income taxes).
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