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Exercise 2-1
Classify each of the following financial statement items taken from Mordica Corporation’s balance sheet.
 Property, plant, and equipmentCurrent assetsLong-term investmentsLong-term liabilitiesCurrent liabilitiesStockholders’ equityIntangible assets |
Accounts payable | |
| Long-term investmentsCurrent liabilitiesLong-term liabilitiesCurrent assetsProperty, plant, and equipmentIntangible assetsStockholders’ equity |
Accounts receivable | |
| Long-term liabilitiesCurrent liabilitiesLong-term investmentsProperty, plant, and equipmentStockholders’ equityCurrent assetsIntangible assets |
Accumulated depreciation—equipment | |
| Property, plant, and equipmentLong-term liabilitiesCurrent assetsIntangible assetsCurrent liabilitiesStockholders’ equityLong-term investments |
Buildings | |
| Intangible assetsLong-term liabilitiesProperty, plant, and equipmentStockholders’ equityLong-term investmentsCurrent assetsCurrent liabilities |
Cash | |
| Intangible assetsCurrent assetsStockholders’ equityCurrent liabilitiesLong-term liabilitiesProperty, plant, and equipmentLong-term investments |
Interest payable | |
| Long-term investmentsStockholders’ equityLong-term liabilitiesProperty, plant, and equipmentCurrent assetsCurrent liabilitiesIntangible assets |
Goodwill | |
| Long-term liabilitiesCurrent assetsProperty, plant, and equipmentIntangible assetsStockholders’ equityLong-term investmentsCurrent liabilities |
Income taxes payable | |
| Intangible assetsCurrent assetsCurrent liabilitiesLong-term investmentsProperty, plant, and equipmentLong-term liabilitiesStockholders’ equity |
Inventory | |
| Property, plant, and equipmentIntangible assetsLong-term liabilitiesStockholders’ equityLong-term investmentsCurrent assetsCurrent liabilities |
Stock investments (to be sold in 7 months) | |
| Long-term investmentsCurrent liabilitiesLong-term liabilitiesProperty, plant, and equipmentStockholders’ equityIntangible assetsCurrent assets |
Land (in use) | |
| Intangible assetsLong-term investmentsLong-term liabilitiesProperty, plant, and equipmentCurrent assetsStockholders’ equityCurrent liabilities |
Mortgage payable | |
| Current assetsLong-term liabilitiesProperty, plant, and equipmentCurrent liabilitiesStockholders’ equityLong-term investmentsIntangible assets |
Supplies | |
| Stockholders’ equityCurrent liabilitiesIntangible assetsCurrent assetsProperty, plant, and equipmentLong-term investmentsLong-term liabilities |
Equipment | |
| Current assetsLong-term investmentsProperty, plant, and equipmentLong-term liabilitiesStockholders’ equityCurrent liabilitiesIntangible assets |
Prepaid rent |
Exercise 2-5
These items are taken from the financial statements of Donavan Co. at December 31, 2014.
| Buildings | $120,295 | |
| Accounts receivable | 14,326 | |
| Prepaid insurance | 3,638 | |
| Cash | 13,462 | |
| Equipment | 93,689 | |
| Land | 69,584 | |
| Insurance expense | 887 | |
| Depreciation expense | 6,026 | |
| Interest expense | 2,956 | |
| Common stock | 68,220 | |
| Retained earnings (January 1, 2014) | 45,479 | |
| Accumulated depreciation—buildings | 51,847 | |
| Accounts payable | 10,802 | |
| Notes payable | 106,423 | |
| Accumulated depreciation—equipment | 21,285 | |
| Interest payable | 4,093 | |
| Service revenue | 16,714 |
Prepare a classified balance sheet. Assume that $15,463 of the note payable will be paid in 2015. (List current assets in order of liquidity and property plant and equipment in order of land, buildings and equipment.)
| DONAVAN COMPANY Balance Sheet December 31, 2014 |
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| Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Liabilities and Stockholders’ Equity | ||||||
| Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Current assetsCurrent LiabilitiesExpensesIntangible assetsLong-term investmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible assetsTotal liabilitiesTotal liabilities and stockholders’ equityTotal Long-term investmentsTotal Long-term liabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal stockholders’ equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Current AssetsCurrent LiabilitiesExpensesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentRevenuesStockholders’ EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal ExpensesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders’ EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal RevenuesTotal Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Revenues Stockholders’ Equity Total Assets Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity |
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| Click if you would like to Show Work for this question: | Open Show Work |
Expert Answer
| As multiple questions have been asked, only only can be answered at a time. | |
| Exercise 2-1 | |
| Accounts payable | Current liabilities |
| Accounts receivable | Current assets |
| Accumulated depreciation—equipment | Property, plant, and equipment |
| Building | Property, plant, and equipment |
| Cash | Current assets |
| Interest payable | Current liabilities |
| Goodwill | Intangible assets |
| Income taxes payable | Current liabilities |
| Inventory | Current assets |
| Stock investments (to be sold in 7 months) | Current assets |
| Land (in use) | Property, plant, and equipment |
| Mortgage payable | Long-term liabilities |
| Supplies | Current assets |
| Equipment | Property, plant, and equipment |
| Prepaid rent | Current assets |
