The information that follows is from Cullen's Hardware Company's June 30, 2014, post-closing trial balance.
Total assets: $625,800 Account name Debit Credit
Cash 42,800
Short-Term Investments 34,300
Sales Supplies 1,280
Merchandise Inventory 145,000
Prepaid Rent 2,100
Income Taxes Payable 3,780
Prepaid Insurance 4,800
Accounts Receivable 287,000
Office Supplies 440
Common Stock 290,000
Notes Receivable 10,000
Land 31,400
Delivery Equipment 43,200
Accumulated Depreciation-Delivery Equipment 28,400
Trademark 4,000
Accounts Payable 124,600
Salaries Payable 7,700
Deposit for Future Advertising 3,680
Interest Payable 840
Retained Earnings 118,880
Long-Term Notes Payable 80,000
Building, Not in Use 44,200
Totals 654,200 654,200
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?