Question

In what section of the balance sheet should the following items appear, and what balance sheet terminology would you use?(a) Treasury stock (recorded at cost).(b) Checking account at bank.(c) Land (held as an investment).(d) Sinking fund.(e) Unamortized premium on bonds payable.(f) Copyrights.(g) Pension fund assets.(h) Premium on capital stock.(i) Long-term investments (pledged against bank loanspayable).

Answer 1

(a) It is appear in Shareholders' Equity. It basically reduces the total stockholder's equity.

(b) It appears in Current assets. It is included in cash.

(c) It appears in investment.

(d) It appears in investment.

(e) It appears in long term debt.

(f) Intangible fixed assets

(g) Investments. "Employees' pension fund," with sub captions of "Cash" and "Securities" if desired.

(h) It is appear in Shareholders' Equity. It is a additional paid-up capital

(i) It appears in Investments. Nature of investments should be given together with parenthetical information as follows: "pledged to secure loans payable to banks."