The poorly trained bookkeeper at Flowing Water Company has shown you the long-term asset section of the

Question:

The poorly trained bookkeeper at Flowing Water Company has shown you the long-term asset section of the company’s balance sheet that he will soon distribute to stockholders. For your convenience, each item is identified with a letter. These letters will not appear in the finished document.

Long-term investments:

(a) Machinery, net ....................$181,600

(b) Office supplies .......................8,710

Property, plant, and equipment:

(d) Patents ........................27,000

(e) Processing plant, net ...................206,960

(f) Obsolete equipment awaiting sale, net ............16,800

Intangible assets:

(g) Prepaid insurance (for next three years) ............21,000

(h) Common stock of Flower Corporation ...................................83,000

Other long-term assets:

(i) Cash ..........................4,722

(j) Standby equipment, net (used only during peak production) .....21,000

(k) Goodwill .........................14,000

(l) Investment in bonds of Beech Brothers, Inc. ............46,000

Write down each of the four category headings above. After each heading, list the letters of the items you believe should be reported under that heading.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Intangible Assets
An intangible asset is a resource controlled by an entity without physical substance. Unlike other assets, an intangible asset has no physical existence and you cannot touch it.Types of Intangible Assets and ExamplesSome examples are patented... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... 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...