Answer:
Explanation:
In the classified balance sheet, we summarize the asset and liabilities into various types
Like assets are divided into fixed assets, current assets, and intangible assets.
Likewise, liabilities are also divided into current liabilities, long term liabilities
In every balance sheet, the accounting equation is used that means
Total assets = Total liabilities + Shareholder equity
Before preparing the classified balance sheet first, we have to compute the net income or loss and then, accordingly finding out the ending balance of retained earnings. The calculation is shown below:
Net income = Service revenue - Insurance expense - Interest expense - depreciation expense
= $13,524 - $718 - $2,392 - $4,876
= $5,538
And, the ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid
= $36,810 + $5,538 - $0
= $42,339
The preparation of the classified balance sheet for Libby corporation on December 31, 2011 is presented in the spreadsheet. Kindly find the attachment below:
