ch05 - SOLUTIONS TO B EXERCISES E5-1B (1520 minutes) (a)...

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Unformatted text preview: SOLUTIONS TO B EXERCISES E5-1B (1520 minutes) (a) Current asset. (b) Current asset. (c) If the investment in preferred stock is readily marketable and held with the intention of converting the stock to cash if the need should arise, then the account should appear as a current asset and be included with trading securities. If, on the other hand, the preferred stock is not readily marketable or is not held with the intention of selling, the account should be classified in the investment section. (d) Current liability. (e) Current liability. (f) If the company accounts for the treasury stock on the cost basis, the account should properly be shown as a reduction of total stockholders equity. (g) Current liability. (h) If the warehouse in process of construction is being constructed for another party, it is properly classified as an inventory account in the current asset section. This account will be shown net of any billings on the contract. On the other hand, if the warehouse is being constructed for the use of this particular company, it should be classified as a separate item in the property, plant, and equipment section. (i) Retained earnings. (j) Current liability. (k) Current asset. (l) Current liability. (m) Property, plant, and equipment (as a deduction). (n) Capital stock. 5-1 E5-2B (1520 minutes) 1. b. 11. a. 2. a. 12. h. 3. f. 13. a. 4. g. 14. a. 5 f. 15. d. 6. b. 16. f. 7. h. 17. f. 8. a. 18. c. 9. a. 19. g. 10. c. 20. f. E5-3B (1520 minutes) 1. f. 10. d. 2. a. or e. (preferably a.) 11. f. or g. 3. f. 12. b. 4. c. 13. a. 5 x. 14. h. 6. f. 15. f. or g. 7. c. and n. 16. f. 8. a. 17. a. 9. i. 18. a. 5-2 E5-4B (3035 minutes) Cluver Inc. Balance Sheet December 31, 20xx Assets Current assets Cash $XXX Less: Cash restricted for plant expansion XXX $XXX Accounts receivable XXX Less: Allowance for doubtful accounts XXX XXX Notes receivable XXX Receivablesofficers XXX Inventories Finished goods XXX Work in process XXX Raw materials XXX XXX Total current assets $XXX Long-term investments Preferred stock investments XXX Land held for future plant site XXX Cash restricted for plant expansion XXX Total long-term investments XXX Property, plant, and equipment Buildings XXX Less: Accum. depreciation buildings XXX XXX Intangible assets Copyrights XXX Total assets $XXX 5-3 E5-4B (Continued) Liabilities and Stockholders Equity Current liabilities Accrued salaries payable $XXX Notes payable, short-term XXX Unearned subscriptions revenue XXX Unearned rent revenue XXX Total current liabilities $XXX Long-term debt Bonds payable, due in four years $XXX Discount on bonds payable (XXX ) XXX Total liabilities XXX Stockholders equity Capital stock Common stock XXX Additional paid-in capital Premium on common stock XXX Total paid-in capital XXX Retained earnings XXX Total paid-in capital and retained earnings XXX Less: Treasury stock, at cost (XXX ) Total stockholders equity XXX Total liabilities and stock- holders equity $XXX Note: As assumption made here is that cash included the cash restricted...
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This note was uploaded on 05/10/2010 for the course ACC 440 BSB1568 taught by Professor Warwick during the Spring '09 term at University of Phoenix.

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ch05 - SOLUTIONS TO B EXERCISES E5-1B (1520 minutes) (a)...

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