Ellis Worton, the owner of Worton Consulting, showed the following unadjusted account balances at December 31, 2023, the business’s year-end (accounts have been listed in alphabetical order):

*Assume normal account balances.

Other information:
1. There were two reconciling items on the bank reconciliation: an outstanding cheque in the amount of $620 and an NSF cheque for $2,835.
2. A review of the Prepaid Rent account showed that the unexpired portion was $2,250.
3. Annual depreciation on the store fixtures is $7,900.

Required
Prepare the December 31, 2023, classified balance sheet.

Analysis Component:

a. Calculate Worton Consulting’s current ratio and quick-test ratio at December 31, 2023. Compare and comment. Round calculations to two decimal places.

b. Recalculate the current ratio and quick-test ratio assuming the current portion of the note payable was reported as part of the long-term liabilities. Compare your results to part (a) and comment. Round calculations to two decimal places.

Transcribed Image Text:

Accounts payable Accounts receivable Accumulated depreciation, store fixtures Cash Cost of goods sold Delivery expense Account 11,330 89,560 69,000 Interest expense 2,240 Notes payable (principal of $20,000 to be paid in 2024) 56,000 Petty cash 350 Prepaid rent Ellis Worton, capital Ellis Worton, withdrawals Rent expense Salaries expense Salaries payable Sales Account Balance $ 31,500 46,250 61,000 19,340 469,000 Sales returns and allowances Store fixtures 16,200 11,250 213,000 17,750 721,400 6,000 113,250