Question

The following are the typical classifications used in a balance sheet:

a. current assets
b. investments and funds
c. property plant and equipment
d. intangible assets
e. other assets
f. currents liabilities
g. long term liabilities
h. paid in capital
I. retained earnings
Required: For each of the following balance sheets items, use the above letters to indicate the appropriate classification category. If the item is a contra account, place a minus sign before the chosen letter.
1.) Equipment
2.) Accounts payable
3.) Allowance for uncollectible accounts
4.) Land held for investment
5.) Note payable due in 5 years
6.) Deferred rent revenue
7.) Note payable due in 6 months
8.) Income less dividends
9.) Investment in XYZ Corp. long-term
10.) Inventories
11.) Patent
12.) Land in use
13.) Accrued liabilities
14.) Prepaid rent
15.) Commons stock
16.) Building
17.) Cash
18.) Taxes payable

Answer 1

The appropriate classification for each item in the balance sheet are: 1.) Equipment - Property plant and equipment; 2.) Accounts payable - Current liabilities; 3.) Allowance for uncollectible accounts - Other assets; 4.) Land held for investment - Investments and funds; 5.) Note payable due in 5 years - Long-term liabilities; 6.) Deferred rent revenue - Other assets; 7.) Note payable due in 6 months - Long-term liabilities; 8.) Income less dividends - Retained earnings; 9.) Investment in XYZ Corp. long-term - Investments and funds; 10.) Inventories - Current assets; 11.) Patent - Intangible assets; 12.) Land in use - Property plant and equipment; 13.) Accrued liabilities - Current liabilities; 14.) Prepaid rent - Current assets; 15.) Common stock - Paid-in capital; 16.) Building - Property plant and equipment; 17.) Cash - Current assets; 18.) Taxes payable - Current liabilities.

Step-by-step explanation:

1.) Equipment - c

2.) Accounts payable - f

3.) Allowance for uncollectible accounts - e

4.) Land held for investment - b

5.) Note payable due in 5 years - g

6.) Deferred rent revenue - e

7.) Note payable due in 6 months - g

8.) Income less dividends - h

9.) Investment in XYZ Corp. long-term - b

10.) Inventories - a

11.) Patent - d

12.) Land in use - c

13.) Accrued liabilities - f

14.) Prepaid rent - a

15.) Common stock - i

16.) Building - c

17.) Cash - a

18.) Taxes payable - f