1 - Intermediate Accounting (Kieso)

Question

(L03) (Preparation of a Classified Balance Sheet, Periodic Inventory) Presented below is a list of accounts in alphabetical order.

Accounts Receivable-Inventory-Ending                                                                        

Accumulated Depreciation—Buildings-Land              

Accumulated Depreciation—Equipment           Land for Future Plant Site 

Accumulated Other Comprehensive Income -   Loss from Flood 

Advances to Employees-                                    Noncontrolling Interest 

Advertising Expense -                                        Notes Payable (due next year) 

Allowance for Doubtful Accounts -   Paid-in Capital in Excess of Par— preferred stock

Bond Sinking Fund  -Patents                                          

Bonds Payable  -   Payroll Taxes Payable                                               

Buildings   -   Pension Liability                                                        

Cash (in bank) -  Petty Cash                                                  

Cash (on hand)   -    Preferred Stock                                             

Cash Surrender Value of Life Insurance           -Premium on Bonds Payable

 

Commission Expense-  Prepaid Rent                                      

Common Stock-                                                  Purchase Returns and Allowances 

Copyrights  -     Purchases                                                    

Debt Investments (trading)-                               Retained Earnings 

Dividends Payable-                                            Salaries and Wages Expense (sales) 

Equipment  -                                                       Salaries and Wages Payable 

Freight-In Sales-                                                Discounts 

Gain on Disposal of Equipment-                        Sales Revenue 

Interest Receivable -                                           Treasury Stock (at cost) 

Inventory—Beginning                                        Unearned Subscriptions Revenue

Instructions Prepare a classified balance sheet in good form. (No monetary amounts are to be shown.)

Step-by-Step Solution

Answer

The company’s balance sheet reports only those accounts whose balances must be carried forward to next year.

Definition of Off-Balance Sheet Items

The items that are not reported on the balance sheet of the company are known as off-balance sheet items. It includes items that are not directly owned by the business entity and liabilities towards which the business entity does not have a direct obligation.

Classified Balance sheet

Particular	Amount $	Amount $
Assets
Current assets:
Cash (in bank)
Cash (on hand)
Other cash accounts (petty cash)
Accounts receivables
Less: allowance for doubtful accounts
Inventory at end
Prepaid rent
Interest receivable
Advance to employees
Cash surrender value of life insurance
Total current assets
Long term investment:
Debt investment
Property, plant, and equipment
Land
Building
Less: Accumulated depreciation – building
Equipment
Less: Accumulated depreciation – equipment
Intangible assets
Patent
Copyrights
Total assets
Liabilities and shareholder’s equity
Current liabilities:
Note payable
Salaries and wages payable
Dividend payable
Payroll tax payable
Unearned subscription payable
Total current liabilities
Non-Current liabilities
Land held for future use
Pension liability
Bond sinking fund
Bond payable
Add: premium on bond payable
Total non-current liabilities
Stockholder’s equity:
Preferred stock
Common stock
Additional paid-in preferred capital
Less: Treasury stock
Retained earnings
Accumulated other comprehensive income
Non-controlling interest
Total stockholder’s equity