Chapter 4, Problem 4.14E

To determine

Balance Sheet:

A Balance Sheet is a statement showing the position of the assets, liabilities and the owner’s equity at the end of the financial year.

$\text{Assets}=\text{Liabilities}+\text{Shareholder's}\text{Funds}$

Liquidity:

Liquidity refers to the ability of a company to pay off its short-term liabilities by the assets that are easily convertible into cash.

To prepare: (a) The classified Balance Sheet assuming that the note payable of $22,000 will be paid in 2016, and (b) comment on the liquidity of the company.