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Balance Sheet Classifications

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Presented below are a number of balance sheet accounts of Deep Blue Something, Inc.

1. Investment in Preferred Stock - Investments
2. Treasury Stock - Capital Stock
3. Common Stock -
4. Cash Dividends Payable
5. Accumulated Depreciation
6. Warehouse in Process of Construction
7. Petty Cash
8. Accrued Interest on Notes Payable
9. Deficit
10. Trading Securities
11. Income Taxes Payable
12. Unearned Subscription Revenue
13. Work in Progress
14. Accrued Vacation Pay

Indicate the proper balance sheet classification for each of the above accounts.

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1. Long term assets following PP&E on the balance sheet (5 below) assuming the intent is to hold for investment
2. Equity - a negative capital account disclosed separately within equity
3. Equity - a separately stated component of the equity section
4. Current liabilities assuming the dividends will be paid within one year
5. Plant, property and equipment - as a negative (reduction) of depreciable assets and stated separately
6. Plant, property and equipment ...

Solution Summary

The solution provides the classfiication for the type of account listed and also gives an explanation for the placement.

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Adjustments and Balance Sheet Classification

I attached the information and the questions in Word format. Please assist me.
Selected amounts at December 31, 2003 from the Hay and Barnabas Company's information system appear as follows:

Cash paid employees for salaries and wages
$
300,000

Cash collected from sales customers

1,850,000

Bonds payable

500,000

Cash

150,000

Common stock

60,000

Equipment

840,000

Prepaid insurance

30,000

Inventory

250,000

Prepaid rent

140,000

Retained earnings

130,000

Salaries and wages expense

328,000

Sales

2,000,000

1. There are five adjustments that need to be made before the financial statements can be prepared at year end. Show the effect of each of the following (a - e) on the accounting equation.
a. The equipment (purchased on January 1, 2003) has a useful life of 12 years with no salvage value (Straight-line method is used).
b. Interest accrued on the bonds payable is $20,000 as of December 31, 2003.
c. Unexpired insurance at December 31, 2003 is $7,000.
d. The rent payment of $140,000 covered the four months from December 1, 2003 through March 31, 2004.
e. Salaries and wages of $28,000 were earned but unpaid at December 31, 2003.

2. Indicate the proper balance sheet classification of each of the preceding 12 financial statement items on the December 31, 2003 balance sheet. If the account title would not appear on the balance sheet, indicate the financial statement on which it would be found.
a. Current assets
b. Property, plant and equipment
c. Current liabilities
d. Long-term liabilities
e. Stockholders' equity

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