Identifying Where Items are Disclosed in Financial Statements and Notes

The following items a through e are excerpts from financial statements and accompanying notes. Indicate where the excerpt is likely reported: 1, 2 or 3.

1. Disclosed as part of the summary of significant accounting policies note.
2. Disclosed as part of a separate note.
3. Reported on the face of the balance sheet.

a. Nonvested shares of restricted stock had a market value of $37.0 million at the	Answer123
end of the year.
b. Inventories are stated at the lower of cost or net realizable value. Cost is determined	Answer123
on the first-in, first-out (FIFO) method and is net of discounts or rebates received
from vendors.
c. Preferred Stock, par value $1; shares authorized, 25,000,000; no shares outstanding in the	Answer123
current year or prior year.
d. Depreciation of property, plant and equipment is computed using the straight-line method	Answer123
over the estimated useful lives of the assets, ranging from 3 to 10 years for machinery
and equipment and up to 45 years for buildings.
e. The company has $100 million in lines of credit with various banks, which are uncommitted	Answer123
and can be terminated at any time by either the company or the banks.