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Exercise 2-5
These items are taken from the financial statements of Donavan Co. at December 31, 2014.
| Buildings | $120,295 | |
| Accounts receivable | 14,326 | |
| Prepaid insurance | 3,638 | |
| Cash | 13,462 | |
| Equipment | 93,689 | |
| Land | 69,584 | |
| Insurance expense | 887 | |
| Depreciation expense | 6,026 | |
| Interest expense | 2,956 | |
| Common stock | 68,220 | |
| Retained earnings (January 1, 2014) | 45,479 | |
| Accumulated depreciation—buildings | 51,847 | |
| Accounts payable | 10,802 | |
| Notes payable | 106,423 | |
| Accumulated depreciation—equipment | 21,285 | |
| Interest payable | 4,093 | |
| Service revenue | 16,714 |
Prepare a classified balance sheet. Assume that $15,463 of the note payable will be paid in 2015. (List current assets in order of liquidity and property plant and equipment in order of land, buildings and equipment.)
| DONAVAN COMPANY Balance Sheet December 31, 2014 |
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 Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Liabilities and Stockholders’ Equity | ||||||
| Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Current assetsCurrent LiabilitiesExpensesIntangible assetsLong-term investmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible assetsTotal liabilitiesTotal liabilities and stockholders’ equityTotal Long-term investmentsTotal Long-term liabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal stockholders’ equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Click if you would like to Show Work for this question: | Open Show Work |
| SHOW LIST OF ACCOUNTS |
Expert Answer
| working | |||
| Income statement | |||
| Service revenue | 16,714 | ||
| Less: expenses | |||
| Insurance expense | 887 | ||
| Depreciation expense | 6,026 | ||
| Interest expense | 2,956 | ||
| Total expenses | 9,869 | ||
| Net income | 6,845 | ||
| Statement of retained earnings | |||
| Retained earnings (January 1, 2014) | 45,479 | ||
| Add: Net income | 6,845 | ||
| Ending Balance | 52,324 | ||
| Balance Sheet | |||
| For the year ended December 31 2014 | |||
| Assets | |||
| Current assets | |||
| Cash | 13,462 | ||
| Accounts receivable | 14,326 | ||
| Prepaid insurance | 3,638 | ||
| Total current assets | 31,426 | ||
| Property Plant and equipment | |||
| Land | 69,584 | ||
| Buildings | $120,295 | ||
| Less: Accumulated depreciation—buildings | -51,847 | $68,448 | |
| Equipment | 93,689 | ||
| Less: Accumulated depreciation—equipment | -21,285 | 72,404 | |
| Net Property Plant and equipment | $210,436 | ||
| Total Assets | $241,862 | ||
| Liabilities & Stockholder Equity | |||
| Current Liabilities | |||
| Accounts payable | 10,802 | ||
| Interest payable | 4,093 | ||
| Total Current Liabilities | 14,895 | ||
| Long term liabilties | |||
| Notes payable | 106,423 | ||
| Total liabilities | 121,318 | ||
| Stockholder equity | |||
| Common stock | 68,220 | ||
| Retained earnings | 52,324 | ||
| Total Stockholder equity | 120,544 | ||
| TotalLiabilities & Stockholder Equity | 241,862 |
