ch5 - Q7 The major limitations of the balance sheet are(a The values stated are generally historical and not at fair value(b Estimates have to be used

ch5 - Q7 The major limitations of the balance sheet are(a...

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Q7. The major limitations of the balance sheet are: (a) The values stated are generally historical and not at fair value. (b) Estimates have to be used in many instances, such as in the determination of collectibility of receivables or finding the approximate useful life of long-term tangible and intangible assets. (c) Many items, even though they have financial value to the business, presently are not recorded. One example is the value of a company s human resources. Q11. No. Available-for-sale securities should be reported as a current asset only if management expects to convert them into cash as needed within one year or the operating cycle, whichever is longer. If available-for-sale securities are not held with this expectation, they should be reported as long-term investments. EXERCISE 5-2 1. h. 11. b. 2. d. 12. f. 3. f. 13. a. 4. f. 14. h. 5 c. 15. c. 6. a. 16. b. 7. f. 17. a. 8. g. 18. a. 9. a. 19. g. 10. a. 20. f.
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EXERCISE 5-7 Current assets Cash .................................................................... $ 87,000* Less: Restricted cash (plant expansion) ......... 50,000 $ 37,000 Trading securities at fair value (cost, $31,000) ............................................................ 29,000
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  • Spring '14
  • Balance Sheet, ........., Generally Accepted Accounting Principles, Q7., Accum. depreciation—, Scott Butler Corporation

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