The following items were taken from the financial statements of Buttercup Company. (All dollars are in thousands.) Mortgage payable $2,443 Accumulated depreciation $3,655 Prepaid insurance 880 Accounts payable 1,444 Property, plant, and equipment 11,500 Notes payable after 2022 1,200 Long-term investments 1,100 Common stock 5,000 Short-term investments 3,690 Retained earnings 8,480 Notes payable in 2022 1,000 Accounts receivable 1,696 Cash 2,600 Inventories 1,756 Prepare a classified balance sheet in good form as of December 31, 2015. (Enter amounts in thousands. List current assets in order of liquidity.)

Answer and Explanation:

The preparation of the classified balance sheet is presented below:

Buttercup Company

Balance Sheet

December 31, 2022

(in thousands)

Assets

Current Assets  

Cash $2,600  

Short-term investments $3,690  

Accounts receivable $1,696  

Inventories $1,756  

Prepaid expenses$880  

Total current assets $10,622

Long-term investments $1,100

Property, plant, and equipment  

Property, plant, and equipment $11,500  

Less: Accumulated depreciation -$3,655    $7,845

Total assets $19,567

Liabilities and Owner's Equity

Current liabilities  

Notes payable in 2022 $1,000  

Accounts payable $1,444  

Total current liabilities  $2,444

Long-term liabilities  

Mortgage payable$2443  

Notes payable (after 2022) $1,200  

Total long-term liabilities $3,643

Total liabilities $6,087

Owner's equity  

Owner’s capital $13,480 ($5,000 + $8,480)

Total liabilities and owner's equity $19,567

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