Assets are owned by the company or entity or any individual which helps in the production of goods and generating revenues. Assets can be converted into the cash whenever required by the company. Liabilities are the obligation of the company or entity or any individual which is to be settled on time. These obligations are raised in order to expand the business profits. Stockholder’s equityincludes company’s net worth i.e. common stock, preference shares , debentures, bonds, retained earnings , etc. The classification of each of the given assets and liabilities as current asset (CA), non-current asset (NCA), current liability (CL) or long-term liability (LTL).

Question

Want to see the full answer?

Answer 1

Question

Chapter 2, Problem 2.5E

To determine

Introduction:Assets are owned by the company or entity or any individual which helps in the production of goods and generating revenues. Assets can be converted into the cash whenever required by the company.

Liabilities are the obligation of the company or entity or any individual which is to be settled on time. These obligations are raised in order to expand the business profits.

Stockholder’s equityincludes company’s net worth i.e. common stock, preference shares, debentures, bonds, retained earnings, etc.

The classification of each of the given assets and liabilities as current asset (CA), non-current asset (NCA), current liability (CL) or long-term liability (LTL).

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Which group of items would most likely be included in the other assets account onthe balance sheet?a) Inventories, marketable securities, bonds.b) Land held for investment purposes and long-term prepayments.c) One-year prepaid insurance policy, stock investments, copyrights.d) Inventories, franchises, patents.

The following are the typical classifications used in a balance sheet: a. Current assets f. Current liabilities b. Investments g. Long-term liabilities c. Property, plant, and equipment h. Paid-in capital d. Intangible assets i. Retained earnings e. Other assets Required:For each of the following 2021 balance sheet items, use the letters above to indicate the appropriate classification category. (If the item is a contra account, select the appropriate letter with a minus sign.) Interest Payable __ Franchise __ Accumulated Depreciation __ Prepaid Insurance (for 2022) __ Bonds Payable (due in 10 years) __ Current Maturities of Long-Term Debt __ Notes Payable (due in 3 months) __ Long-Term Receivables __ Restricted Cash (which will be used to retire bonds in 10 years) __ Supplies __ Machinery __ Land (used in operations) __ Deferred Revenue (for 2022) __ Copyrights __ Common Stock __ Land (held for speculation) __ Cash equivalents __ Salaries Payable __

For each of the following assets or liabilities, state whether it is current or non-current: Accounts Payable Cash Property, Plant, and Equipment Note Payable Inventory