Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

2

Expert-verified
Intermediate Accounting (Kieso)
Found in: Page 240

Short Answer

(Classification of Balance Sheet Accounts) Presented below are the captions of Faulk Company’s balance sheet.

(a) Current assets

(f) Current liabilities

(b) Investments

(g) Noncurrent liabilities

(c) Property, plant, and equipment

(h) Capital stock

(d) Intangible assets

(i) Additional paid-in capital

(e) Other assets

(j) Retained earnings

Instructions

Indicate by letter where each of the following items would be classified.

1. Preferred stock

11. Cash surrender value of life insurance

2. Goodwill

12. Note payable

3. Salaries and wages payable

13. Supplies

4. Account payable

14. Common stock

5. Building

15. Land

6. Equity investment (trading)

16. Bond sinking fund

7. Current maturity of long-term debt

17. Inventory

8. Premium on bond payable

18. Prepaid insurance

9. Allowance for doubtful accounts

19. Bond payable

10. Accounts receivable

20. Income tax payable

The classified balance sheet reports all the assets and liabilities based on their liquidity.

See the step by step solution

Step by Step Solution

Definition of intangible assets

The business entity’s resources that do not have any physical existence, although they benefit the business entity, are known as intangible assets. It includes goodwill and patent.

Classification of line items 

Line item

Classification

1. Preferred stock

(h) Capital stock

2. Goodwill

(d) Intangible assets

3. Salaries and wages payable

(f) Current liabilities

4. Account payable

(f) Current liabilities

5. Building

(c) Property, plant, and equipment

6. Equity Investment (trading)

(a) Current assets

7. Current maturity of long-term debt

(f) Current liabilities

8. Premium on bond payable

(g) Noncurrent liabilities

9. Allowance for doubtful accounts

(a) Current assets

10. Accounts receivable

(a) Current assets

11. Cash surrender value of life insurance

(e) Other assets

12. Note payable (due next year)

(f) Current liabilities

13. Supplies

(a) Current assets

14. Common stock

(h) Capital stock

15. Land

(c) Property, plant, and equipment

16. Bond sinking fund

(e) Other assets

17. Inventory

(a) Current assets

18. Prepaid insurance

(a) Current assets

19. Bond payable

(g) Noncurrent liabilities

20. Income tax payable

(f) Current liabilities

Most popular questions for Business-studies Textbooks

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.