91Ó°ÊÓ

(L03) (Preparation of a Classified Balance Sheet, Periodic Inventory) Presented below is a list of accounts in alphabetical order.

Accounts Receivable-Inventory-Ending

Accumulated Depreciation—Buildings-Land

Accumulated Depreciation—Equipment Land for Future Plant Site

Accumulated Other Comprehensive Income - Loss from Flood

Advances to Employees- Noncontrolling Interest

Advertising Expense - Notes Payable (due next year)

Allowance for Doubtful Accounts - Paid-in Capital in Excess of Par— preferred stock

Bond Sinking Fund -Patents

Bonds Payable - Payroll Taxes Payable

Buildings - Pension Liability

Cash (in bank) - Petty Cash

Cash (on hand) - Preferred Stock

Cash Surrender Value of Life Insurance -Premium on Bonds Payable

Commission Expense- Prepaid Rent

Common Stock- Purchase Returns and Allowances

Copyrights - Purchases

Debt Investments (trading)- Retained Earnings

Dividends Payable- Salaries and Wages Expense (sales)

Equipment - Salaries and Wages Payable

Freight-In Sales- Discounts

Gain on Disposal of Equipment- Sales Revenue

Interest Receivable - Treasury Stock (at cost)

Inventory—Beginning Unearned Subscriptions Revenue

Instructions Prepare a classified balance sheet in good form. (No monetary amounts are to be shown.)

Step by step solution

01

Definition of Off-Balance Sheet Items

The items that are not reported on the balance sheet of the company are known as off-balance sheet items. It includes items that are not directly owned by the business entity and liabilities towards which the business entity does not have a direct obligation.

02

Classified Balance sheet

Particular	Amount $	Amount $
Assets
Current assets:
Cash (in bank)
Cash (on hand)
Other cash accounts (petty cash)
Accounts receivables
Less: allowance for doubtful accounts
Inventory at end
Prepaid rent
Interest receivable
Advance to employees
Cash surrender value of life insurance
Total current assets
Long term investment:
Debt investment
Property, plant, and equipment
Land
Building
Less: Accumulated depreciation – building
Equipment
Less: Accumulated depreciation – equipment
Intangible assets
Patent
Copyrights
Total assets
Liabilities and shareholder’s equity
Current liabilities:
Note payable
Salaries and wages payable
Dividend payable
Payroll tax payable
Unearned subscription payable
Total current liabilities
Non-Current liabilities
Land held for future use
Pension liability
Bond sinking fund
Bond payable
Add: premium on bond payable
Total non-current liabilities
Stockholder’s equity:
Preferred stock
Common stock
Additional paid-in preferred capital
Less: Treasury stock
Retained earnings
Accumulated other comprehensive income
Non-controlling interest
Total stockholder’s equity

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