/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q3E Question: E5-3 (L02,3) (Classifi... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 5: Q3E (page 240)

Question: E5-3 (L02,3) (Classification of Balance Sheet Accounts) Assume that Fielder Enterprises uses the following headings on its balance sheet.

(a) Current assets

(g) Long-term liabilities

(b) Investments

(h) Capital stock

(c) Property, plant, and equipment

(i) Equity attribute to non-controlling interest

(d) Intangible assets

(i) paid-in-capital in excess of par

(e) Other assets

(k) Retained earnings

(f) Current liabilities

Instructions

Indicate by letter how each of the following usually should be classified. If an item should appear in a note to the financial statements, use the letter 鈥淣鈥� to indicate this fact. If an item need not be reported at all on the balance sheet, use the letter 鈥淴.鈥�

1. Prepaid insurance.

2. Stock owned in affiliated companies.

3. Unearned service revenue.

4. Advances to suppliers.

5. Unearned rent revenue.

6. Preferred stock.

7. Additional paid-in capital on preferred stock.

8. Copyrights.

9. Petty cash fund.

10. Sales taxes payable.

11. Accrued interest on notes receivable.

12. Twenty-year issue of bonds payable that will mature within the next year. (No sinking fund exists, and refunding is not planned.)

13. Machinery retired from use and held for sale.

14. Fully depreciated machine still in use.

15. Accrued interest on bonds payable.

16. Salaries that company budget shows will be paid to employees within the next year.

17. Discount on bonds payable. (Assume related to bonds payable in item 12.)

18. Accumulated depreciation鈥攂uildings.

19. Shares held by non-controlling stockholders.

Short Answer

Expert verified

Answer

The investment will include the resources or assets acquired by the business entity or individual to gain financial advantages due to a change in their fair value

Step by step solution

01

Definition of Retained earnings

Business entities keep some earnings for future prospectuses, such as paying dividends to the investors and re-investment. Such portion of earnings is known as retained earnings.

02

Classification of Line Items

1. Prepaid insurance:(a) Current assets.

2. Stock owned in affiliated companies:(b) Investments.

3. Unearned service revenue:(f) Current liabilities

4. Advances to suppliers:(a) Current assets.

5. Unearned rent revenue:(f) Current liabilities

6. Preferred stock: (h) Capital stock

7. Additional paid-in capital on preferred stock:(i) Additional paid-in capital.

8. Copyrights:(d) Intangible assets.

9. Petty cash fund:(a) Current assets.

10. Sales taxes payable:(f) Current liabilities

11. Accrued interest on notes receivable:(a) Current assets.

12. Twenty-year issue of bonds payable that will mature within the next year. (No sinking fund exists, and refunding is not planned.):(f) Current liabilities

13. Machinery retired from use and held for sale:(e) Other assets.

14. Fully depreciated machine still in use:(c) Property, plant, and equipment.

15. Accrued interest on bonds payable:(f) Current liabilities

16. Salaries that the company budget shows will be paid to employees within the next year:(f) Current liabilities

17. Discount on bonds payable. (Assume related to bonds payable in item 12.):(f) Current liabilities

18. Accumulated depreciation鈥攂uildings:(c) Property, plant, and equipment.

19. Shares held by non-controlling stockholders: (i) Equity attributed to non-controlling interest

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Perez Company reported an increase in inventories in the past year. Discuss the effect of this change on the current ratio (current assets 梅 current liabilities). What does this tell a statement user about Perez Company鈥檚 liquidity?

4. Franco Company uses IFRS and owns property, plant, and equipment with a historical cost of \(5,000,000. At December 31, 2016, the company reported a valuation reserve of \)690,000. At December 31, 2017, the property, plant, and equipment was appraised at \(5,325,000. The valuation reserve will show what balance at December 31, 2017?

(a) \)365,000.

(b) \(325,000.

(c) \)690,000.

(d) $0.

Each of the following items must be considered in preparing a statement of cash flows. Indicate where each item is to be reported in the statement, if at all. Assume that net income is reported as \(90,000.

(a) Accounts receivable increased from \)34,000 to \(39,000 from the beginning to the end of the year.

(b) During the year, 10,000 shares of preferred stock with a par value of \)100 per share were issued at \(115 per share.

(c) Depreciation expense amounted to \)14,000, and bond premium amortization amounted to \(5,000.

(d) Land increased from \)10,000 to $30,000.

EXCEL (Current Assets Section of the Balance Sheet) Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2017.

Inventory

\(52,000

Cost of goods sold

2,100,000

Unearned service revenue

90,000

Note receivable

40,000

Equipment

253,000

Account receivable

161,000

Inventory (Work-in-process)

34,000

Inventory (raw material)

207,000

Cash

37,000

Supplies Expenses

60,000

Debt investment (Short-term)

31,000

Allowance for doubtful accounts

12,000

Customer advances

36,000

License

18,000

Restricted cash for plant expansion

50,000

Additional paid-in-capital

88,000

Treasury stock

22,000

The following additional information is available.

1. Inventories are valued at lower-of-cost or market using LIFO.

2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is \)50,600.

3. The short-term investments have a fair value of \(29,000. (Assume they are trading securities.)

4. The notes receivable are due April 30, 2019, with interest receivable every April 30. The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2017.)

5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of \)50,000 are pledged as collateral on a bank loan.

6. Licenses are recorded net of accumulated amortisation of $14,000.

7. Treasury stock is recorded at cost.

Instructions

Prepare the current assets section of Yasunari Kawabata Company鈥檚 December 31, 2017, balance sheet, with appropriate disclosures.

The New York Knicks, Inc. sold 10,000 season tickets at $2,000 each. By December 31, 2017, 16 of the 40 home games had been played. What amount should be reported as a current liability at December 31, 2017?
See all solutions

Recommended explanations on Business Studies Textbooks

Strategy

Read Explanation

Change Management

Read Explanation

Family Business

Read Explanation

Project Planning & Management

Read Explanation

Business Case Studies

Read Explanation

Corporate Finance

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.