A311Chapter 5 Problems - E5-2 (Classification of Statement...

A311Chapter 5 Problems
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E5-2 (Classification of Statement of Financial Position Accounts) Presented below are the captions of Nikos Company's balance sheet. (a) Non-current assets. (c) Equity. (1) Investments. (d) Non-current liabilities. (2) Property, plant, and equipment. (e) Current liabilities. (3) Intangible assets. (4) Other assets. (b) Current assets. Indicate by letter where each of the following items would be classified. 1. Share capital-preference. c 2. Goodwill. a3 3. Wages payable. e 4. Trade accounts payable. e 5. Buildings. a2 6. Trading securities. b 7. Current portion of long-term debt. e 8. Patent. a3 9. Allowance for doubtful accounts. b 10. Accounts receivable. b 11. Accumulated other comprehensive income. c 12. Notes payable (due next year). e 13. Office supplies. b 14. Share capital-ordinary. c 15. Land. a2 16. Bond sinking fund. a1 17. Merchandise inventory. b 18. Prepaid insurance. b 19. Bonds payable. d 20. Taxes payable. e ***************************************************************************** ********
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(Preparation of a Classified Statement of Financial Position) Assume that Gulistan Inc. has the following accounts at the end of the current year. 1. Share Capital-Ordinary. 14. Accumulated Depreciation–Buildings. 2. Long-Term Note Payable. 15. Cash Restricted for Plant Expansion. 3. Treasury Stock (at cost). 16. Land Held for Future Plant Site. 4. Note Payable, short-term. 17. Allowance for Doubtful Accounts- 5. Raw Materials. Accounts Receivable. 6. Long-Term Investment in Preference Shares. 18. Retained Earnings. 7. Unearned Rent Revenue. 19. Share Premium-Ordinary. 8. Work in Process. 20. Unearned Subscriptions Revenue. 9. Copyrights. 21. Receivables–Officers (due in one year). 10. Buildings. 22. Finished Goods. 11. Notes Receivable (short-term). 23. Accounts Receivable. 12. Cash. 24. Bonds Payable (due in 4 years). 13. Accrued Salaries Payable. Prepare a classified statement of financial position in good form. (No monetary amounts are necessary. List current assets in reverse order of liquidity and current liabilities in alphabetical order, with notes first.) GULISTAN INC. Statement of Financial Position December 31 Assets Non-current assets Long-term investments Long-term investment in preference shares $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: Accumulated depreciation-buildings XXX XXX Intangible assets Copyrights XXX
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(Preparation of a Corrected Statement of Financial Position) Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion. BRUNO COMPANY Statement of Financial Position December 31, 2010 Current assets Cash $260,000 Accounts receivable (net) 340,000 Inventories at lower-of-average-cost-or-net realizable value 401,000 Trading securities-at cost (fair value $120,000) 140,000 Property, plant, and equipment Building (net) 570,000 Office equipment (net) 160,000 Land held for future use 175,000 Intangible assets Goodwill 80,000 Other identifiable assets 90,000 Prepaid expenses 12,000 Current liabilities Accounts payable 135,000 Notes payable (due next year) 125,000 Pension obligation 82,000 Rent payable 49,000 Premium on bonds payable 53,000
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