Question

The following accounts appear in an adjusted trial balance of Blaine Auto Service Company. Indicate whether each account would be reported in the (a) current assets, (b) property, plant, and equipment, (c) current liabilities, (d) long-term liabilities, or (e) owner's equity section of the December 31 balance sheet of Blaine Auto Service Company.

1. Blaine Brock, Capital
2. Accumulated Depreciation
3. Unearned Revenues
4. Mortgage Payable
5. Equipment
6. Notes Payable (due in two years)
7. Cash
8. Accounts Receivable

Answer 1

In the Blaine Auto Service Company balance sheet, Blaine Brock, Capital is in owner's equity; Accumulated Depreciation and Equipment are in property, plant, and equipment; Unearned Revenues and Cash are in current liabilities and current assets, respectively; and Mortgage Payable and Notes Payable are in long-term liabilities.

Step-by-step explanation:

The following accounts from an adjusted trial balance of Blaine Auto Service Company would be reported in different sections of the December 31 balance sheet:

• Blaine Brock, Capital - (e) owner's equity section
• Accumulated Depreciation - (b) property, plant, and equipment (as a contra asset account)
• Unearned Revenues - (c) current liabilities
• Mortgage Payable - (d) long-term liabilities
• Equipment - (b) property, plant, and equipment
• Notes Payable (due in two years) - (d) long-term liabilities
• Cash - (a) current assets
• Accounts Receivable - (a) current assets

Answer 2

1.(e)

2.(b)

3.(c)

4.(d)

5.(b)

6.(d)

7.(a)

8.(a)

Step-by-step explanation:

Current assets : Are assets of a short term nature that can be easyly be converted into cash within a period of 12 months Example is Accounts Receivables

Property, plant, and equipment : Are long term investment assets that can not be easy be converted into cash with a period of 12 months.They increase or fall in value (depreciate) over the period.

Current Liabilities : Obligations due within a period of 12 months

Long term Liabilities : Obligations not due within a period of 12 months

Equity : Includes Owners Interest in the firm.