E5-3B (Classification of Balance Sheet Accounts) Assume that Clark Enterprises uses the following headings on its balance sheet.
(a) Current assets. (f) Current liabilities.
(b) Investments. (g) Long-term liabilities.
(c) Property, plant, and equipment. (h) Capital stock.
(d) Intangible assets. (i) Paid-in capital in excess of par.
(e) Other assets. (j) Retained earnings.
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 “N” to indicate this fact. If an item need not be reported at all on the balance sheet, use the letter “X.”
1. twenty-year issue of bonds payable that will mature within the next year. (No sinking fund exists, and refunding is not planned.).
2. Machinery retired from use and held for sale.
3. Discount on bonds payable. (Assume related companies to bonds payable in No. 1, above.)
4. Accumulated depreciation..
5. Salaries that company budget shows will be paid to employees within the next year.
6. Accrued interest on bonds payable..
7. Fully depreciated machine still in use.
8. Accrued interest on notes receivable
9. Premium on preferred stock
10. Copyrights
11. Unearned subscriptions revenue.
12. Stock owned in affiliated
13. Advances to suppliers.
14. Treasury stock
15. Unearned rent revenue.
16. Sales tax payable
17. Petty cash fund
18. Unexpired insurance.
THIS IS THE ANSWER THAT I GOT
1. Twenty-Year issue of bonds payable that will mature within the next year. (No sinking fund exists, and refunding is not planned)
(f) CURRENT LIABILITY
2. Machinery retired from use and held for sale
(a) CURRENT ASSETS
(e) OTHER ASSETS
3. Discount on bonds payable. (Assume related to bonds payable in No. 12)
(f) CURRENT LIABILITY
4. Accumulated depreciation
(c) PROPERTY, PLANT AND EQUIPMENT
5. Salaries that company budget shows will be paid to employees within the next year.
“X”
.
6. Accrued interest on bonds payable
(f) CURRENT LIABILITY
7. Fully depreciated machine still in use
(c) PROPERTY, PLANT, AND EQUIPMENT OR “N”
.
8. Accrued interest on notes receivable
(a) CURRENT ASSET
9. Premium on preferred stock
(i) PAID-IN CAPITAL IN EXCESS OF PAR
10. Copyrights
(d) INTANGIBLE ASSETS
11. Unearned subscriptions revenue
(f) CURRENT LIABILITY
.
12. Stock owned in affiliated companies
(b) INVESTMENT
13. Advances to suppliers
(a) CURRENT ASSET
.
14. Treasury stock
(a) CURRENT ASSET
(i) PAID-IN CAPITAL IN EXCESS OF PAR
15. Unearned rent revenue
(f) CURRENT LIABILITY
.
16. Sales tax payable
(f) CURRENT LIABILITY
17. Petty Cash fund
(a) CURRENT ASSET
18. Unexpired Insurance
(a) CURRENT ASSET