Transactions during 2016 were as follows: The note payable is dated June 30, 201

Question

Transactions during 2016 were as follows:

The note payable is dated June 30, 2015 and is due on June 30, 2017. Interest at 8% is payable annually on June 30. Depreciation on the furniture and fixtures for the year is $36,000. The furniture and fixtures originally cost $460,000.

Prepare a classified balance sheet at December 31, 2016 (ignore income taxes). (Amounts to be deducted should be indicated by a minus sign.)

The following is the balance sheet of Korver Supply Company at December 31, 2015.

Explanation / Answer

Working notes:

T- Accounts:

Balance sheet:

Accounts receivables $960,000            Sales $960,000 Cash $940,000             Accounts receivables $940,000 Inventories $650,000              Accounts payable $650,000 Accounts payable $660,000             Cash $660,000 Cost of goods sold $600,000             Inventories $600,000 Operating expenses $320,000             Cash $320,000 Interest expenses $ 24,800             Cash $ 24,800 Depreciation expenses $ 36,000              Accumulated depreciation $360,000

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