Assignment 2 -Chapter 4

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Classifications on Balance Sheet

A balance sheet may contain the following major sections:

Current assets

Long-term investments

Property, plant, and equipment

Intangible assets

Other assets

Current liabilities

Long-term liabilities

Contributed capital

Retained earnings

Accumulated other comprehensive income

Required:

The following is a list of accounts. Using the letters A through J, indicate in which section of the balance sheet each account would most likely be classified. Then, indicate if the account is a contra account or an account that would normally be deducted on the balance sheet.

Account

Classification Contra or

Deducted (Yes/No)

1. Investments in Marketable Securities

B

Yes

2. Discount on Bonds Payable (bonds due in 5 years)

G

Yes

3. Additional Paid-in Capital on Common Stock

H

Yes

4. Accounts Receivable

5. Notes Payable (due in 5 years)

6. Patents (net)

7. Unrealized Decrease in Fair Value of Available for-Sale Securities

8. Preferred Stock

9. Unearned Rent (to be earned within next 6 months)

10. Accrued Pension Cost

11. Trademarks

12. Deficit

13. Salaries Payable

14. Land

15. Investment in Ace Company Preferred Stock (to be held for 3 years)