Cone Corporation is in the process of preparing its December 31, 2013, balance sheet. There are some

Question:

Cone Corporation is in the process of preparing its December 31, 2013, balance sheet. There are some questions as to the proper classification of the following items:

a. $50,000 in cash set aside in a savings account to pay bonds payable. The bonds mature in 2017.

b. Prepaid rent of $24,000, covering the period January 1, 2014, through December 31, 2015. [Prepaid expenses for a period extending beyond the coming year, a portion of the prepayment are classified as another asset, a noncurrent asset.]

c. Note payable of $200,000. The note is payable in annual installments of $20,000 each, with the first installment payable on March 1, 2014.

d. Accrued interest payable of $12,000 related to the note payable.

e. Investment in marketable securities of other corporations, $80,000. Cone intends to sell one half of the securities in 2014.


Required:

Prepare a partial classified balance sheet to show how each of the above items should be reported.


Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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