[denali9696]

Hello All,

I would like to ask for your help in putting this classified balance sheet together. I have attempted to do so, but I'm not quite sure if I even have a grasp on exactly where the items actully go. Please help!:confused:
From the following data, prepare a classified balance sheet for Simon Company at December 31, 2006.

Accounts payable $ 62,500
Accounts receivable $123,000
Buildings $418,500
Owners’ equity, 1/1/06 $210,000
Cash $179,750
Distribution to owners during 2006 $ 21,750
Supplies $ 3,750
Land $130,000
Mortgage income for 2006 $479,500
Net Income for 2006 $124,750
Owners’ equity, 12/31/06 ?_____

Simon Company
December 31, 2006

ASSETS LIABILITIES & OWNER’S EQUITY

Current Assets Current Liabilities
Cash $179,750 Accounts Payable $ 62,500
Accounts Receivable 123,000
Supplies 3,750

Investments Long-term liabilities
Mortgage Payable $479,500
Property, Plant, and Equipment Total Liabilities
Land $130,000
Buildings $418,500
Intangible Assets
Net Income for 2006 $124,750
Other Assets Owner’s Equity
Distribution to Owners during 2006 21,750
Owners Equity, 1/1/06 210,000

Total Assets Total Liabilities & Owner’s Equity
Owners’ equity, 12/31/06 ?

[morgaine300]

Boy, do I hate when they give info alphabetically. Makes me bonkers.

First, a classified balance sheet is not divided into current and long-term. It is, but I mean, it's main division is not current and long-term. It's main division has not changed. That is, you still list assets first and they are in one section. The other section is the liabilities and the equity. That is always true and will never change.

When you "classify," yes, you are dividing those sections down further. But you're dividing the same sections into further smaller sections, not moving them around.

You actually do have them divided into current and long-term correctly. You just need to put the assets back together and the liabilities back together.

i.e.:

Assets
Current Assets:
Cash 179,750
A/R 123,000
Supplies 3750
Total Current 306,500

Plant Assets:
Land 130,000
Building 418,500
Total Plant 548,500

Total Assets 855,000


See, all the assets are still in the asset section. You need to think about your accounting equation: Assets = Liabilities + Owner's Equity. This equation is very important and the backbone of much in accounting. Your balance sheet is based on this. You don't ever mix everything up like that, but keep your assets together, liabilities together, etc. The only time you'll start pulling things out and putting current assets with current liabilities is if you're doing cash flows or financial analysis or something. But those are entirely different subjects. A balance sheet should look like your equation.

Don't list intangible assets if you don't have any. Yes, it's a section, but just leave it off altogether if you have none.

The pieces of the owner's equity doesn't belong on the balance sheet. The ending balance does.

Equity Beginning Balance + Net Income - Distributions = Ending Balance

give this another try.

[denali9696]

Boy, do I hate when they give info alphabetically. Makes me bonkers.

First, a classified balance sheet is not divided into current and long-term. It is, but I mean, it's main division is not current and long-term. It's main division has not changed. That is, you still list assets first and they are in one section. The other section is the liabilities and the equity. That is always true and will never change.

When you "classify," yes, you are dividing those sections down further. But you're dividing the same sections into further smaller sections, not moving them around.

You actually do have them divided into current and long-term correctly. You just need to put the assets back together and the liabilities back together.

i.e.:

Assets
Current Assets:
Cash 179,750
A/R 123,000
Supplies 3750
Total Current 306,500

Plant Assets:
Land 130,000
Building 418,500
Total Plant 548,500

Total Assets 855,000


See, all the assets are still in the asset section. You need to think about your accounting equation: Assets = Liabilities + Owner's Equity. This equation is very important and the backbone of much in accounting. Your balance sheet is based on this. You don't ever mix everything up like that, but keep your assets together, liabilities together, etc. The only time you'll start pulling things out and putting current assets with current liabilities is if you're doing cash flows or financial analysis or something. But those are entirely different subjects. A balance sheet should look like your equation.

Don't list intangible assets if you don't have any. Yes, it's a section, but just leave it off altogether if you have none.

The pieces of the owner's equity doesn't belong on the balance sheet. The ending balance does.

Equity Beginning Balance + Net Income - Distributions = Ending Balance

Go ahead and give this another try.

Thank you very much for your assistance. Here is what I did per your response:
ASSETS

Current Assets
Cash $179,750
Accounts Receivable 123,000
Supplies 3,750
Total Cash $306,500

Plant Assets:
Land $130,000
Buildings $418,500
Total $548,500

Total Assets $855,000

LIABILITIES & OWNER’S EQUITY
Current Liabilities
Accounts Payable $ 62,500

Long-term liabilities
Mortgage Payable $479,500

Total Liabilities $542,000


Owner’s Equity
Owners Equity, 1/1/06 210,000
Net Income for 2006 124,750
Distribution to Owners during 2006 21,750
Owners’ equity, 12/31/06 $313,000

Total Liabilities & Owner’s Equity $855,000

[morgaine300]

Mostly correct. The 306,500 total is current assets, not cash. :-) (I'll assume that was a type.)

You also do not show the calculation for equity on the balance, only the ending balance. i.e. only the 313,000 goes on it.