Use the following adjusted trial balance of Webb Trucking Company to prepare a classified balance
sheet as of December 31, 2005.Account Title Debit Credit
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,000
Accounts receivable . . . . . . . . . . . . . . . . . . . 16,500
Office supplies . . . . . . . . . . . . . . . . . . . . . . 2,000
Trucks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,000
Accumulated depreciation—Trucks . . . . . . . . $ 35,000
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . 11,000
Interest payable . . . . . . . . . . . . . . . . . . . . . . 3,000
Long-term notes payable . . . . . . . . . . . . . . . 52,000
K.Webb, Capital . . . . . . . . . . . . . . . . . . . . . 161,000
K.Webb, Withdrawals . . . . . . . . . . . . . . . . . 19,000
Trucking fees earned . . . . . . . . . . . . . . . . . . 128,000
Depreciation expense—Trucks . . . . . . . . . . . 22,500
Salaries expense . . . . . . . . . . . . . . . . . . . . . 60,000
Office supplies expense . . . . . . . . . . . . . . . . 7,000
Repairs expense—Trucks . . . . . . . . . . . . . . . 11,000
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $390,000 $390,000
To prepare a classified balance sheet, you need to categorize the different accounts into appropriate sections. The sections typically include assets, liabilities, and equity.
Here's how you can prepare the classified balance sheet using the adjusted trial balance:
1. Start with the assets section:
- Cash: $7,000
- Accounts receivable: $16,500
- Office supplies: $2,000
- Trucks: $170,000
- Less: Accumulated depreciation—Trucks: $35,000
Total Assets: $160,500 ($7,000 + $16,500 + $2,000 + $170,000 - $35,000)
2. Move to the liabilities section:
- Accounts payable: $11,000
- Interest payable: $3,000
- Long-term notes payable: $52,000
Total Liabilities: $66,000 ($11,000 + $3,000 + $52,000)
3. Calculate the equity:
- K.Webb, Capital: $161,000
- K.Webb, Withdrawals: $19,000
Total Equity: $142,000 ($161,000 - $19,000)
4. Finally, create the balance sheet by combining the assets, liabilities, and equity:
Webb Trucking Company
Balance Sheet (As of December 31, 2005)
Assets
Cash $7,000
Accounts receivable $16,500
Office supplies $2,000
Trucks $170,000
Less: Accumulated depreciation—Trucks $35,000
Total Assets $160,500
Liabilities
Accounts payable $11,000
Interest payable $3,000
Long-term notes payable $52,000
Total Liabilities $66,000
Equity
K.Webb, Capital $161,000
K.Webb, Withdrawals $19,000
Total Equity $142,000
Total Liabilities and Equity $208,000 ($66,000 + $142,000)
Please note that the total assets ($160,500) should match the total liabilities and equity ($208,000).