Question

Exercise 3-2 (Static) Balance sheet classification [LO3-2, 3-3] The following are the typical classifications used in a balance sheet: a. Current assets f. Current liabilities b. Investments g. Long-term liabilities c. Property, plant, and equipment h. Paid-in capital d. Intangible assets i. Retained earnings e. Other assets Required: For each of the following balance sheet items, use the letters above to indicate the appropriate classification category. (If the item is a contra account, select the appropriate letter with a minus sign.)

Answer 1

Answer:

1. Accrued interest payable: f. Current liabilities

2. Franchise: e. Other assets (intangible asset)

3. Accumulated depreciation: c. Property, plant, and equipment (contra asset account)

4. Prepaid insurance, for 2017: a. Current assets

5. Bonds payable, due in 10 years: g. Long-term liabilities  

6. Current maturities of long-term debt: f. Current liabilities

7. Note payable, due in three months: f. Current liabilities

8. Long-term receivables: b. Investments

9. Restricted cash, will be used to retire bonds in 10 years: b. Investments

10. Supplies: a. Current assets  

11. Machinery: c. Property, plant, and equipment

12. Land, in use: c. Property, plant, and equipment

13. Deferred revenue: f. Current liabilities  

14. Copyrights:  e. Other assets (intangible asset)

15. Preferred stock : h. Paid-in capital  

16. Land, held for speculation: b. Investments

17. Cash equivalents: a. Current assets  

18. Wages payable: f. Current liabilities