5 exercises due tomorrow evening

E5-2 (Classification of Balance Sheet Accounts) Presented below are the captions of Faulk Company’s balance sheet.

(a)Current assets. (b) Investments. (c) Property, plant, and equipment. (d) Intangible assets. (e)Other assets.


(f)Current liabilities. (g) Noncurrent liabilities. (h) Capital stock. (i)Additional paid-in capital. (j)Retained earnings.

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

1.Preferred stock. 2.Goodwill. 3.Salaries and wages payable. 4.Accounts payable. 5. Buildings. 6.Equity investments (trading). 7.Current maturity of long-term debt. 8.Premium on bonds payable. 9.Allowance for doubtful accounts.

10.Accounts receivable.

11.Cash surrender value of life insurance. 12.Notes payable (due next year). 13.Supplies. 14.Common stock.

15. Land. 16.Bond sinking fund. 17.Inventory. 18.Prepaid insurance. 19.Bonds payable. 20.Income taxes payable.

-4 (Preparation of a Classified Balance Sheet) Assume that Denis Savard Inc. has the following accounts at the end of the current year.

1.Common Stock. 2.Discount on Bonds Payable. 3.Treasury Stock (at cost). 4.Notes Payable (short-term). 5.Raw Materials. 6.Preferred Stock Investments (long-term). 7.Unearned Rent Revenue. 8.Work in Process. 9.Copyrights.

10.Buildings. 11.Notes Receivable (short-term). 12.Cash. 13.Salaries and Wages Payable.


14.Accumulated Depreciation—Buildings. 15.Restricted Cash for Plant Expansion. 16.Land Held for Future Plant Site. 17.Allowance for Doubtful Accounts.

18.Retained Earnings. 19.Paid-in Capital in Excess of Par—Common Stock. 20.Unearned Subscriptions Revenue. 21.Receivables—Officers (due in one year). 22.Inventory (finished goods). 23.Accounts Receivable. 24.Bonds Payable (due in 4 years). 25.Noncontrolling Interest.

E5-12 (Preparation of a Balance Sheet) Presented below is the trial balance of Scott Butler Corporation at

December 31, 2014.




153,000 4,800,000 299,000 277,000



900,000 211,000 597,000



191,000 195,000


Cash Sales Revenue Debt Investments (trading) (at cost, $145,000) Cost of Goods Sold Debt Investments (long-term) Equity Investments (long-term) Notes Payable (short-term) Accounts Payable Selling Expenses Investment Revenue Land 260,000 Buildings 1,040,000 Dividends Payable Accrued Liabilities Accounts Receivable Accumulated Depreciation—Buildings Allowance for Doubtful Accounts Administrative Expenses Interest Expense Inventory Gain (extraordinary) Notes Payable (long-term) Equipment Bonds Payable Accumulated Depreciation—Equipment Franchises Common Stock ($5 par) Treasury Stock Patents Retained Earnings Paid-in Capital in Excess of Par

Prepare a balance sheet at December 31, 2014, for Scott Butler Corporation. (Ignore income taxes.)

E5-13 (Statement of Cash Flows—Classifications) The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as:

1.Operating activity—add to net income. 2.Operating activity—deduct from net income. 3.Investing activity. 4.Financing activity. 5.Reported as significant noncash activity.

The transactions are as follows.

(a)Issuance of common stock. (b) Purchase of land and building. (c)Redemption of bonds. (d) Sale of equipment. (e)Depreciation of machinery. (f)Amortization of patent. (g)Issuance of bonds for plant assets.

(h)Payment of cash dividends. (i)Exchange of furniture for office equipment. (j)Purchase of treasury stock. (k)Loss on sale of equipment. (l)Increase in accounts receivable during the year. (m)Decrease in accounts payable during the year.

P5-2(Balance Sheet Preparation) for the current year, 2014.

Goodwill Payroll taxes payable Bonds payable Discount on bonds payable Cash Land Notes receivable Notes payable (to banks) Accounts payable Retained earnings Income taxes receivable Notes payable (long-term)


Presented below are a number of balance sheet items for Montoya, Inc.,


125,000 177,591 300,000

15,000 360,000 480,000 445,700 265,000 490,000


Accumulated depreciation—equipment Inventory Rent payable (short-term) Income taxes payable

Rent payable (long-term) Common stock, $1 par value Preferred stock, $10 par value Prepaid expenses

? 97,630 1,600,000

292,000 239,800 45,000 98,362 480,000 200,000 150,000 87,920 Equipment 1,470,000 Equity investments (trading)121,000 Accumulated depreciation—buildings270,200 Buildings 1,640,000

Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and pre- ferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of equity investments (trading) are the same

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