Question

Exercise 5.1

the SPE, whether son cannot be considered as revenues etc. Exercises: solved or to be solved; for your practise Exercise 5.1 Balance Sheet Items it is current or non- Instructions: Decide what type of balance sheet item it is, and state if it is current current. Balance sheet items: 1. Accrued salaries and wages. Clavery 2. Rental revenues for 3 months collected in advance. 3. Land used as plant site. N cwers asted 4. Equity securities classified as trading areas 5. Cash. Carters 6. Accrued interest payable due in 30 days. 7. Premium on preferred stock issue. 8. Dividends in arrears on preferred stock. 9. Petty cash fund. Canese 10. Unamortized discount on bonds payable due 2023. 11. Common stock at par value. 12. Bond indenture covenants. 13. Unamortized premium on bonds payable due the following year. 14. Allowance for doubtful accounts. C contra are account 15. Accumulated depreciation. avsed with Walance N long seun contra aused 138

Answer 1

Answer -

No.	Balance sheet items	Current / Non-current	Explanation
1.	Accrued salaries and wages.	Current Liabilities	It is the amount of dues payable to employees, but not yet paid to them. at the end of a reporting period.
2.	Rental revenues for 3 months collected in advance.	Current Liabilities	Under the accrual basis of accounting, revenues received in advance are reported as a current liability.
3.	Land used as plant site.	Non-current Assets	It is property plant and equipment.
4.	Equity securities classified as trading.	Current Asset	These investments are considered as short‐term assets.
5.	Cash	Current Asset	Cash can be readily converted within one year and can be used to pay short-term debt.
6.	Accrued interest payable due in 30 days.	Current Liabilities	Current liability is a obligation that is due within one year.
7.	Premium on preferred stock issue.	Stockholders Equity	Premium on preferred stock issue is a part of Stockholders Equity.
8.	Dividends in arrears on preferred stock.	Notes on Financial Statements	These dividends have not been authorized by the board of directors.
9.	Petty cash fund.	Current Asset	Petty cash fund is a small amount of money available for paying small expenses, It is a current asset.
10.	Unamortized discount on bonds payable due 2023.	Non-current Liabilities	It is a Long term liability.
11.	Common stock at par value	Stockholders Equity	Common stock at par value is a part of Stockholders Equity.
12.	Bond indenture covenants	Notes on Financial Statements	It is classified as Notes on Financial Statements
13.	Unamortized premium on bonds payable due the following year	current Liabilities	It is a current Liabilities because it is due within one year.
14.	Allowance for doubtful accounts	Current Asset	It is classified as current assets.
15.	Accumulated depreciation	Non-current Assets	Accumulated depreciation accounts are asset accounts with a credit balance. It is shown in property plant and equipment in balance sheet.