Balance sheet assume that the operating cycle is shorter

Assignment Help Accounting Basics

Reference no: EM13591164

The following items represent liabilities on a firm's balance sheet:

a. An amount of money owed to a supplier based on the terms 2/20, n/40, for which no note was executed.

b. An amount of money owed to a creditor on a note due April 30, 2013.

c. An amount of money owed to a creditor on a note due August 15, 2014.

d. An amount of money owed to employees for work performed during the last week in December.

e. An amount of money owed to a bank for the use of borrowed funds due on March 1, 2013.

f. An amount of money owed to a creditor as an annual installment payment on a ten-year note.

g. An amount of money owed to the federal government based on the company's annual income.

Required

1. For each item, state whether it should be classified as a current liability on the December 31,

2012, balance sheet. Assume that the operating cycle is shorter than one year. If the item should not be classified as a current liability, indicate where on the balance sheet it should be presented.

2. For each item identified as a current liability in part (1), state the account title that is normally used to report the item on the balance sheet.

3. Why would an investor or a creditor be interested in whether an item is a current or a longterm liability?

Reference no: EM13591164

Questions Cloud

Discuss how understanding a companys business the first : discuss how understanding a companys business the first step in equity valuation might be useful in performing a

Prepare the appropriate entry when the options are awarded : lci cable company grants 1.4 million performance stock options to key executives at january 1 2013. the options entitle

The jung corporations budget calls for the following : the jung corporations budget calls for the following productionquarter 1 45000 unitsquarter 2 38000 unitsquarter 3

The diameter of a car tire is 40cm and the diameter of a : the diameter of a car tire is 40cm and the diameter of a toy car tire is 18mm. find the ratio of the diameter of the

Balance sheet assume that the operating cycle is shorter : the following items represent liabilities on a firms balance sheeta. an amount of money owed to a supplier based on the

Arrow industries employs a standard cost system in which : arrow industries employs a standard cost system in which direct materials inventory is carried at standard cost. arrow

A company constructs a building for its own use : a company constructs a building for its own use. construction began on january 1 and ended on december 30. the

Marvin currently has a balance of 1192 in an account he has : marvin currently has a balance of 1192 in an account he has held for 14 years. he opened the account with an initial

Should the government mandate minimum standards for : discuss some types of personal information that companies collect from their customers and discuss what they are used

User Account

All Pages