Chapter 5 Part 1 class examples

Example 1 Which of the following accounts is reported in balance sheet?

1. Accounts Receivable

2. Land

3. Sales revenue

4. Interest payable

5. Retained Earnings

6. Salary Expenses

7.Additional paid-in capital

8.Rent payable

9.Common Stock

Example 2

The correct order to present current assets is

1. Cash, accounts receivable, prepaid items, inventories.
2. Cash, accounts receivable, inventories, prepaid items.
3. Cash, inventories, accounts receivable, prepaid items.
4. Cash, inventories, prepaid items, accounts receivable

Example 3

The current assets section of the balance sheet should include

a. machinery.

b. patents.

c. goodwill.

d. inventory.

Example 4: Current assets

Harding Corporation has the following accounts included in its December 31, 2020 trial balance: Accounts Receivable $110,000, Inventory $290,000, Allowance for Doubtful Accounts $8000, Patents $72,000, Prepaid Insurance $9500, Accounts payable $77000 and cash $30,000.

Prepare the current assets section of the balance sheet listing the accounts in proper sequence.

Example 5

Land held for speculation is reported in the property, plant, and equipment section of the balance sheet.

TRUE FALSE

Example 6: Long term investment

Included in Outkast Company December 31, 2020 trials balance are the following accounts:

Prepaid rent $5200, Debt Investment (to be held to maturity until 2023) $56,000, Unearned Fees $17000, Land (Held for investment) $39,000, and Notes Receivable (Long-term) $42000.

Prepare the long-term investments section of the balance sheet.

Example 7: PPE

Lowell Company's December 31, 2020, trial balance includes the following accounts: Inventory $120,000, Buildings $207,000; Accumulated Depreciation-equipment $19000, Equipment $190,000. Land (held for investment) $46,000, accumulated depreciation-buildings $45,000, land $71,000. and Timberland $70,000.

Prepare the property, plant and equipment section of the balance sheet.

Example 8

For Grimmett Company, the following information is available:

Capitalized leases $600,000

Trademarks 275,000

Long-term receivables 225,000

In Grimmett's balance sheet, intangible assets should be reported at

a. $275,000. b. $500,000.

c. $825,000. d. $875,000.