Task: The following information is from the September, post-closing trial balance of Dante Nuts and Bolts Company.
Account Name Debit Credit
Cash $ 31,000
Short-Term Investments 33,000
Notes Receivable 10,000
Accounts Receivable 276,000
Merchandise Inventory 145,000
Prepaid Rent 1,600
Prepaid Insurance 4,800
Sales Supplies 1,280
Office Supplies 440
Deposit for Future Advertising 3,680
Building, Not in Use 49,600
Land 22,400
Delivery Equipment 41,200
Accumulated Depreciation-Delivery Equipment $ 28,400
Trademark 4,000
Accounts Payable 114,600
Salaries Payable 5,200
Interest Payable 840
Long-Term Notes Payable 80,000
Mr. Dante, Capital 394,960
1. From the information provided, prepare a classified balance sheet for Dante Nuts And Bolts Company.
2. Compute Dante’s Nuts and Bolts current ratio and debt to equity ratio.
3. As a user of the classified balance sheet, why would you want to know the current ratio or the debt to equity ratio?