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Chapter 2: 13BP (page 50)

Classify the following balance sheet items as current or noncurrent:

Retained earning

Bond payable

Accounts payable

Accrued wages payable

Prepaid expenses

Accounts receivable

Plant and equipment

Capital in excess of par

Inventory

Preferred stock

Common stock

Marketable security

Short Answer

Expert verified

Current asset means the assets which can reasonably be expected to be realizable within a year or during the normal operating cycle of the business.

Step by step solution

01

Non-current assets

The non-current assets mean the assets which can not be expected to be realized in the normal operating cycle or within one year.

02

Classification of balance sheet item as current or non-current

Particulars

Classification

Retained earnings

NA

Bonds payable

Non-current

Accounts payable

Current

Accrued wages payable

Current

Prepaid expenses

Current

Accounts receivable

Current

Plant and equipment

Non-current

Capital in excess of par

NA

Inventory

Current

Preferred stock

NA

Common stock

NA

Marketable security

Current

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Most popular questions from this chapter

Fill in the blank spaces with categories 1 through 7:

1. Balance sheet (BS)

2. Income statement (IS)

3. Current assets (CA)

4. Fixed assets (FA)

5. Current liabilities (CL)

6. Long-term liabilities (LL)

7. Stockholders鈥� equity (SE)

Indicate whether item is on Balance sheet (BS) or Income statement (IS)

If on Balance sheet, designate which category

Item

Accounts receivable

Retained earnings

Income tax expense

Accrued expense

Cash

Selling and administrative expenses

Plant and equipment

Operating expenses

Marketable securities

Interest expense

Sales

Notes payable (6 month)

Bonds payable, maturity 2019

Common stock

Depreciation expense

Inventories

Capital in excess of par value

Net income (earning after tax)

Income tax payable

Frantic Fast Foods had earnings after taxes of $420,000 in 20X1 with 309,000 shares outstanding. On January 1, 20X2, the firm issued 20,000 new shares. Because of the proceeds from these new shares and other operating improvements, earnings after taxes increased by 30 percent.

a. Compute earnings per share for the year 20X1.

b. Compute earnings per share for the year 20X2.

What are the basic benefits and purposes of developing pro forma statements and a cash budget?

The Sterling Tire Company鈥檚 income statement for 20X1 is as follows:

STERLINE TIRE COMPANY

Income Statement

For the year ended December 31, 20X1

Sales (20,000 tires at \(60 each)

\)1,200,000

Less: variable costs (20,000 tires at \(30)

600,000

Less: fixed cost

400,000

Earnings before interest and taxes (EBIT)

\)200,000

Interest expenses

50,000

Earning before taxes (EBT)

\(150,000

Income tax expenses (30%)

45,000

Earning after taxe (EAT)

\)105,000

Given this income statement, compute the following:

b. Degree of financial leverage.

Dr. Zhiva虁go Diagnostics Corp.鈥檚 income statement for 20X1 is as follows:

Sales\( 2790000
Cost of goods sold1790000
Gross Profits\)1000000
Selling and administrative expenses302000
Operating profits\(698000
Interest Expense54800
Income before taxes\)643200
Taxes30%192960
Income after-tax$ 450240

Compute the profit margin for 20X1.
See all solutions

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