Question
The following adjusted balances are taken from the ledger of Silverpeak Retail, Inc. at December 31, 2026.
| Account | Amount |
|---|
| Cash | $40,000 |
| Accounts Receivable | 55,000 |
| Merchandise Inventory | 70,000 |
| Supplies | 5,000 |
| Prepaid Insurance | 6,000 |
| Equipment | 180,000 |
| Accumulated Depreciation - Equipment | 60,000 |
| Accounts Payable | 38,000 |
| Salaries Payable | 8,000 |
| Unearned Revenue | 4,000 |
| Notes Payable (due 2031) | 66,000 |
| Common Stock | 130,000 |
| Retained Earnings | 50,000 |
Required: Prepare a classified balance sheet at December 31, 2026 in US GAAP order, ending with total liabilities and stockholders’ equity.
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
IAS 1 — current/non-current distinction
Every asset and liability is classified current or non-current on the basis of the operating cycle and the twelve-month test. Work down the trial balance classifying each item first, and total only once the classification is settled.
Common mistakes
- Leaving the current portion of a long-term borrowing inside non-current liabilities.
- Classifying a prepayment covering more than a year entirely as current.
- Reporting an asset at gross amount where a contra account should reduce it.
Further readingPreparing a balance sheet step by step