Elements of the Balance Sheet For each item listed, indicate whether it qualifies as an element of the balance sheet and why, and, if it does, how it would be classified:

1. Coca-Cola’s secret formula for its classic soft drink.

2. The creative personnel employed by The Walt Disney Company.

3. A company’s commitment to its employees to treat them in a fair and equitable manner.

4. A fifteen-year-old machine that is still operating even though it was expected to last only ten years.

5. The cost of expected future warranty claims on equipment sold during the past several years with the company’s five-year guarantee.

6. Inventory that is now out of style, but can still be sold for 60 percent of its original selling price.

7. A common herb that grows wild throughout much of the United States and, according to the company’s marketing efforts, cures baldness.