E5-4
Question
(Preparation of a Classified Balance Sheet) Assume that Denis Savard Inc. has the following accounts at the end of the current year.
1. Common Stock.
2. Discount on Bonds Payable.
3. Treasury Stock (at cost).
4. Notes Payable (short-term).
5. Raw Materials.
6. Preferred Stock Investments (long-term).
7. Unearned Rent Revenue.
8. Work in Process.
9. Copyrights.
10. Buildings.
11. Notes Receivable (short-term).
12. Cash.
13. Salaries and Wages Payable.
14. Accumulated Depreciation—Buildings.
15. Restricted Cash for Plant Expansion.
16. Land Held for Future Plant Site.
17. Allowance for Doubtful Accounts.
18. Retained Earnings.
19. Paid-in Capital over Par—Common Stock.
20. Unearned Subscriptions Revenue.
21. Receivables—Officers (due in one year).
22. Inventory (finished goods).
23. Accounts Receivable.
24. Bonds Payable (due in 4 years).
25. Noncontrolling Interest.
Instructions
Prepare a classified balance sheet in good form. (No monetary amounts are necessary.)
Step-by-Step Solution
VerifiedThe assets and liabilities are classified based on their due date and when they will benefit the business entity.
The revenue of the business entity, which is considered a liability, is known as unearned revenue. It is considered a liability because it is the advance payment made by the customer for which the business entity is liable to provide service and products in the future.
Particular | Amount $ | Amount $ |
Assets |
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Current assets: |
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Cash |
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Less: Restricted cash for plant expansion |
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Account receivable |
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Less: Allowance for doubtful accounts |
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Note receivable (short term) |
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Receivables – Officer (Due in one year) |
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Inventory: |
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Raw material |
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Work-in-progress |
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Finished goods |
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Long-Term investment |
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Preferred stock investment |
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Land held for the future plant site |
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Property, plant and equipment |
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Building |
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Less: Accumulated depreciation - building |
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Intangible assets |
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Copyrights |
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Total assets |
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Liabilities |
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Current liabilities: |
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Salaries and wages payable |
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Unearned rent revenue |
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Note payable (short-term) |
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Unearned subscription revenue |
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Total current liabilities |
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Non-Current liabilities |
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Bond payable (in 4 years) |
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Less: Discount on bonds payable |
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Non-controlling interest |
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Total non-current liabilities |
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Total liabilities |
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Stockholder’s equity |
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Common stock |
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Paid-in capital over par - common stock |
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Total paid-in capital |
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Retained earnings |
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Total paid-in capital and retained earnings |
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Less: Treasury stock |
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Total stockholder’s equity |
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Total liabilities and stockholder’s equity |
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