Current—noncurrent classification of debt | | ● LO1 LO4 | The balance sheet at December 31‚ 2011‚ for Nevada Harvester Corporation includes the liabilities listed below: Required: 1. | | Determine the amount that can be excluded from classification as a current liability (that is‚ reported as a noncurrent liability) for each. Explain the reasoning behind your classifications. | | | | Solution: 1.a. A Zero dollars will be excluded from current liability because it is callable within year. Even if the
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Ch8 Student: ___________________________________________________________________________ 1. Delta‚ Northwest‚ and United Airlines have all‚ at one time‚ filed for bankruptcy. True 2. In a classified balance sheet‚ we categorize all liabilities as current. True 3. False A line of credit is an informal agreement that permits a company to borrow up to a prearranged limit without having to follow formal loan procedures and paperwork. True 9. False We record interest expense in the period in
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Classification of Assets and Liabilities in a Balance Sheet We all know that Balance sheet tells us the financial position of a business at a particular point of time. The accounting equation i.e. Assets = Liabilities + Capital forms lays the foundation for the preparation of Balance Sheet. Everything that the business owns are its assets. Alternatively‚ whatever amounts a business owes to outsiders become its liabilities. First let us see how these assets are to be classified. Current
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world-class business. Which student is correct? A. Both B. Student A only C. Neither D. Student B only 3. Which of the following represents the basic accounting equation? A. Owners ’ Equity − Liabilities = Assets B. Liabilities = Assets + Owners ’ Equity C. Assets = Liabilities + Owners ’ Equity D. Assets + Liabilities = Owners ’ Equity 4. Nearly a week before Hurricane Katrina reached New Orleans‚ Wal-Mart began moving trucks and supplies into position‚ as specified in the company ’s ________ plan.
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assets‚ liabilities‚ and owners equity on January1‚ 2012 called the balance sheet. The report the reader will see below is a current balance sheet for a company called Custom Building that I personally work with. Working one on one with the owner has offered quite a bit of experience in the accounting world. The reader will be able to view the balance sheet below‚ following the explanation of the balance sheet for Custom Building discussed in full. Custom Building Company Balance Sheet January
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Example Company Balance Sheet December 31‚ 2011 ASSETS LIABILITIES Current Assets Current Liabilities Cash $ 2‚100 Notes Payable $ 5‚000 Petty Cash 100 Accounts Payable 35‚900 Temporary Investments 10‚000 Wages Payable 8‚500 Accounts Receivable - net 40‚500 Interest Payable 2‚900 Inventory 31‚000 Taxes Payable 6‚100 Supplies 3‚800 Warranty Liability 1‚100 Prepaid Insurance 1‚500 Unearned Revenues 1‚500 Total Current
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Merck Consolidated Balance Sheet | | | | | | € million | ------------------------------------------------- Note | ------------------------------------------------- Dec. 31‚ 2012 | ------------------------------------------------- Dec. 31‚ 2011 | ------------------------------------------------- Jan. 1‚ 2011 | 1 | Previous year’s figures have been adjusted‚ see Note [5] | | Current assets | ------------------------------------------------- | -------------------------------------------------
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A balance sheet‚ like a photo‚ provides a financial picture of a company on a given day and time. It categorizes all of a company’s resources as assets‚ all of its debts as liabilities‚ and all of the owner’s investments as equity. A company uses its assets‚ such as accounts receivable‚ inventory‚ and equipment‚ for manufacturing or purchasing products for sale or to provide a service. A company’s assets are financed by its liabilities (debt) and the owner’s equity (net worth). On a balance sheet
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EXERCISE 1. Nguyen Bich Fitness Club has provided the following information that relates to their financial year ended June 30‚ 2011 Account | Amount ($) | Nguyen Bich - Capital | 350‚000 | Bank Loan – due in October‚ 2012 | 5‚000 | Accounts Payable | 17‚250 | Accounts Receivable | 41‚560 | Cash | 18‚750 | Retained Profits | 76‚000 | Salaries payable | 6‚750 | Supplies | 1‚040 | Salaries Expense | 19‚100 | Buildings | 85‚000 | Prepaid Rent | 15‚600 | Motor Vehicles
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COURSE 2 - The Balance Sheet The balance sheet (also called statement of financial position) reports the financial position of the business at a point in time. It does so by listing the categories and amounts of assets‚ liabilities and equity on a specific date‚ in a format that proves the fundamental accounting equation. ASSETS = EQUITY + LIABILITIES or ASSETS – LIABILITIES = EQUITY Formats of presentation Regardless of
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