Chapter 6
The Accounting Cycle: Statements and Closing Entries
154
Let us see how the sample company used in this chapter would prepare the classified balance sheet.
The balance sheet for MP Consulting was shown in Figure 6.6. It was not a classified balance sheet,
so all assets and liabilities were grouped as one. The company has a $2,500 bank loan, of which
$1,000 will be paid off by January 31, 2017 (one year from the balance sheet date).
The classified balance sheet is shown in Figure 6.24. Notice that $1,000 of the bank loan is classi-
fied as current because it will be paid within the next one-year period.
MP Consulting
Classified Balance Sheet
As at January 31, 2016
Assets
Current Assets
Cash
$3,800
Accounts Receivable
4,000
Prepaid Insurance
1,100
Total Current Assets
$8,900
Property, Plant and Equipment
Equipment
8,300
Less Accumulated Depreciation
(173)
Total Property, Plant and Equipment
8,127
Total Assets
$17,027
Liabilities
Current Liabilities
Accounts Payable
$1,250
Interest Payable
25
Unearned Revenue
1,800
Current Portion of Bank Loan
1,000
Total Current Liabilities
$4,075
Long-Term Liabilities
Long-Term Portion of Bank Loan
1,500
Total Long-Term Liabilities
1,500
Total Liabilities
5,575
Owner's Equity
Parish, Capital
11,452
Total Owner's Equity
11,452
Total Liabilities and Owner's Equity
$17,027
________________
Figure 6.24
