Question
Exercise 14-01 Presented below are various account balances of Blue Sky Inc.. Indicate whether each of the items below should be classified on December 31,
Exercise 14-01
Presented below are various account balances of Blue Sky Inc.. Indicate whether each of the items below should be classified on December 31, 2020, as a current liability, a long-term liability, or under some other classification. Consider each one independently from all others; that is, do not assume that all of them relate to one particular business.
CLASSIFY EACH: (a-i)
(a) Unamortized premium on bonds payable, of which $3,000 will be amortized during the next year. | ||
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(b) Bank loans payable of a winery, due March 10, 2024. (The product requires aging for 5 years before sale and the loan will be paid from sales revenue.) | ||
(c) Serial bonds payable, $1,000,000, of which $200,000 are due each July 31. | ||
(d) Amounts withheld from employees' wages for income taxes. | ||
(e1) Notes payable due January 15, 2023. (operating cycle is greater than one year and current assets are used) | ||
(e2) Notes payable due January 15, 2023. (otherwise) | ||
(f) Credit balances in customers' accounts arising from returns and allowances after collection in full of account. | ||
(g) Bonds payable of $2,000,000 maturing June 30, 2021. | ||
(h) Overdraft of $1,000 in a bank account. (No other balances are carried at this bank.) | ||
(i) Deposits made by customers who have ordered goods. | ||
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