Ellis Worton, the owner of Worton Consulting, showed the following unadjusted account balances at December 31, 2020, the business’s year-end (accounts have been listed in alphabetical order):

Account                                                                                                           Account Balance*
Accounts payable....................................................................................................... $ 31,500
Accounts receivable ..................................................................................................... 46,250
Accumulated depreciation, store fixtures ................................................................. 61,000
Cash ............................................................................................................................... 19,340
Cost of goods sold ..................................................................................................... 469,000
Delivery expense ......................................................................................................... 11,330
Ellis Worton, capital ..................................................................................................... 89,560
Ellis Worton, withdrawals ........................................................................................... 69,000
Interest expense ........................................................................................................... 2,240
Notes payable (principal of $20,000 to be paid in 2021 ........................................ 56,000
Petty cash ......................................................................................................................... 350
Prepaid rent ................................................................................................................ 16,200
Rent expense .............................................................................................................. 11,250
Salaries expense ....................................................................................................... 213,000
Salaries payable .......................................................................................................... 17,750
Sales ........................................................................................................................... 721,400
Sales returns and allowances ..................................................................................... 6,000
Store fixtures ............................................................................................................ 113,250
*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, 2020, classified balance sheet.

Analysis Component:
a. Calculate Worton Consulting’s current ratio and quick-test ratio at December 31, 2020. 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.