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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Dorothy Corporation had the following accounts in its year-end adjusted trial balance: Inventories, $23,600; Accounts Receivable, $7,600; Accounts Payable, $7,200; Prepaid Rent, $2,400; Marketable Securities, $3,000; Allowance for Doubtful Accounts, $1,100; and Cash, $1,500. Prepare the current assets section of Dorothy’s year-end balance sheet.

To determine

Prepare the current assets section of D’s year-end balance sheet.

Explanation

Classified balance sheet: The main elements of balance sheet assets, liabilities, and stockholders’ equity are categorized or classified further into sections, and sub-sections in a classified balance sheet. Assets are further classified as current assets, long-term investments, property, plant, and equipment (PPE), and intangible assets. Liabilities are classified into two sections current and long-term. Stockholders’ equity comprises of common stock and retained earnings. Thus, the classified balance sheet includes all the elements under different sections.

Current Assets: Current assets are the assets that are easily convertible to cash within a year of business operations. For example, cash and cash equals, Account receivables, Inventories, Prepaid Expenses.

Prepare the current assets section of D’s year-end balance sheet:

D Corporation
Bala...

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