Share
Explore BrainMass

Preparation of a Classified Balance Sheet

Following are the December 31, 2006, account balances for Siraco Company.
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,950
Accounts receivable . . . . . . . . . . . . . . . . 2,500
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . 1,800
Equipment . . . . . . . . . . . . . . . . . . . . . . . 11,275
Accounts
Accounts payable . . . . . . . . . . . . . . . . . . $ 3,450
Wages payable . . . . . . . . . . . . . . . . . . . . 250
Dividends paid . . . . . . . . . . . . . . . . . . . . 1,500
Capital stock . . . . . . . . . . . . . . . . . . . . . . 775
Retained earnings, January 1, 2006 . . . . 12,000
Revenues . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Miscellaneous expense . . . . . . . . . . . . . . 1,550
Supplies expense . . . . . . . . . . . . . . . . . . 3,700
Wages expense . . . . . . . . . . . . . . . . . . . 2,200
Required:
1. Prepare a classified balance sheet as of December 31, 2006.
2. Interpretive Question: On the basis of its 2006 earnings, was this company's decision to pay dividends of $1,500 a sound one?

Solution Preview

Following are the December 31, 2006, account balances for Siraco Company.
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,950
Accounts receivable . . . . . . . . . . . . . . . . 2,500
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . 1,800
Equipment . . . . . . . . . . . . . . . . . . . . . . . 11,275
Accounts
Accounts payable . . . . . . . . . . . . . . . . . . $ 3,450
Wages payable . . . . . . . . . . . . . . . . . . . . 250
Dividends paid . . . . . . . . . . . . . . . . . . . . 1,500
Capital stock . . . . . . . . . . . . . . . . . . . . . . 775
Retained earnings, January 1, 2006 . . . . 12,000
Revenues . . . . . . ...

Solution Summary

The solution prepares a Classified Balance Sheet.

$2.19