Concept explainers
Balance sheet classification
• LO3–2, LO3–3
You have been asked to review the December 31, 2018, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior:
1. An investment of $30,000 is included in current assets. Management has indicated that it has no intention of liquidating the investment in 2019.
2. A $100,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10, equal annual installments with the first installment due on March 31, 2019.
3. Deferred revenue of $60,000 is included as a current liability even though only two-thirds will be recognized as revenue in 2019, and the other one-third in 2020. Determine the appropriate classification of each of these items.
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- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,