Reference no: EM132710933
Your friend cannot get the balance sheet of his Company - Tasty Brewery Limited- to balance! He needs your help. His shareholders are demanding a classified balance sheet.
For the year ended December 31, 2020
Assets
Cash $55,500 Accounts payable $11,000
Building $40,000 Accumulated Depreciation 8,000
Unearned Revenue 12,000 Salary payable 2,500
Prepaid insurance 3,000
Accounts receivable 6,000
Supplies 1,500 Partners' Equity 72,500
Totals $118,000 Totals $94,000
Additional notes:
You have determined that the shareholders incorporated Tasty Brewery Limited with $48,250 in share capital.
- 50% of the unearned revenue will not be earned until June 2022.
Required:
Problem a) Prepare, in good format, the classified Balance Sheet as at December 31, 2020.
Problem b) Why do clients prefer a to receive a classified balance sheet? (i.e. how does it help them?)