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The following accounts appear in an adjusted trial balance of Kangaroo Consulting. Indicate whether each account would be reported in the (a) current asset; (b) property, plant, and equipment; (c) current liability; (d) long-term liability; or (e) owner’s equity section of the December 31, 2018, balance sheet of Kangaroo Consulting. 1. Accounts Payable 2. Accounts Receivable 3. Accumulated Depreciation—Building 4. Cash 5. Lea Gabel, Capital 6. Note Payable (due in ten years) 7. Supplies 8. Wages Payable

BuyFind

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
BuyFind

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Solutions

Chapter
Section
Chapter 4, Problem 3PEB
Textbook Problem

The following accounts appear in an adjusted trial balance of Kangaroo Consulting. Indicate whether each account would be reported in the (a) current asset; (b) property, plant, and equipment; (c) current liability; (d) long-term liability; or (e) owner’s equity section of the December 31, 2018, balance sheet of Kangaroo Consulting.

  1. 1. Accounts Payable
  2. 2. Accounts Receivable
  3. 3. Accumulated Depreciation—Building
  4. 4. Cash
  5. 5. Lea Gabel, Capital
  6. 6. Note Payable (due in ten years)
  7. 7. Supplies
  8. 8. Wages Payable

Expert Solution
To determine

Indicate the category in which the account would appear on a classified balance sheet.

Explanation of Solution

Classified Balance Sheet: In order to improve the ease of understanding, a classified balance sheet is used. Classified balance sheet categorizes each item of assets, liabilities, and stockholders ‘equity into a specific category.

A classified balance sheet is prepared under the following heading:

AssetsLiabilities
Current assets:Current liabilities:
CashAccounts payable
Marketable securitiesInterest payable
Accounts receivableUnearned revenues
InventoriesNotes payable
Prepaid expensesCurrent maturities of long-term debt
Office suppliesTotal current liabilities
Total current assets 
Investments:Long-term liabilities:
Marketable securitiesBonds payable
Land held for investmentNotes payable
Total investmentsMortgage payable
 Total long-term liabilities
Property, plant and equipment: 
LandOwners’ equity:
BuildingCapital
EquipmentTotal Liabilities and Shareholders’ Equity
Less: Accumulated depreciation 
Net property, plant and equipment 
Intangibles: 
Copyrights 
Total Assets 

Table (1)

Indicate the category in which the account would appear on a classified balance sheet.

S. NoAccount nameCategory on a classified balance sheet
1.Accounts payableCurrent liabilities
2.Accounts receivableCurrent assets
3.Accumulated depreciation - BuildingProperty, plant and equipment
4.CashCurrent assets
5.LG CapitalOwners’ equity
6...

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Chapter 4 Solutions

Financial Accounting
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