The information that follows is from Cullen's Hardware Company's June 30, 2014, post-closing trial balance.
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Total assets: $625,800
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Account name
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Debit
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Credit
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|
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Cash
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42,800
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|
|
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Short-Term Investments
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34,300
|
|
|
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Sales Supplies
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1,280
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|
|
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Merchandise Inventory
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145,000
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|
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Prepaid Rent
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2,100
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|
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Income Taxes Payable
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|
3,780
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|
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Prepaid Insurance
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4,800
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|
|
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Accounts Receivable
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287,000
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|
|
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Office Supplies
|
440
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|
|
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Common Stock
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|
290,000
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|
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Notes Receivable
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10,000
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Land
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31,400
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|
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Delivery Equipment
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43,200
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|
|
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Accumulated Depreciation-Delivery Equipment
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28,400
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|
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Trademark
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4,000
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Accounts Payable
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124,600
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|
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Salaries Payable
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|
7,700
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Deposit for Future Advertising
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3,680
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|
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Interest Payable
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|
840
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Retained Earnings
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|
118,880
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Long-Term Notes Payable
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80,000
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Building, Not in Use
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44,200
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|
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Totals
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654,200
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654,200
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Required:
1. Prepare a classified balance sheet for Cullen's Hardware Company.
2. Business application- Compute Cullen's Hardware's current ratio and debt to equity ratio. (Round to one decimal place.)
3. Business application- As a user of the classified balance sheet, why would you want to know the current ratio or the debt to equity ratio?