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Chapter 3: Q26DQ (page 139)

Refer to the most recent balance sheet for Apple in Appendix A. What five main noncurrent asset categories are used on its classified balance sheet?

Short Answer

Expert verified

In the company’s classified balance sheet, the current asset and noncurrent assets are both shown under the head of the asset—the noncurrent item ae recorded below the current assets.

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01

Definition of non-current assets

Non-current assets are those assets that cannot convert into cash within 12 months.

02

Five non-current asset categories

  • Long-term marketable securities
  • Property, plant and equipment, net
  • Goodwill
  • Acquired intangible assets, net
  • Other assets

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Most popular questions from this chapter

Choose from the following list of terms/phrases to best complete the statements below.

a. Fiscal year d. Accounting period g. Natural business year

b. Timeliness e. Annual financial statements h. Time period assumption

c. Calendar year f. Interim financial statements i. Quarterly statements

1. presumes that an organization’s activities can be divided into specific time periods.

2. Financial reports covering a one-year period are known as .

3. A(n) consists of any 12 consecutive months.

4. A(n) consists of 12 consecutive months ending on December 31.

5. The value of information is often linked to its .

Question: Choose from the following list of terms/phrases to best complete the statements below.

a. Fiscal year d. Accounting period g. Natural business year

b. Timeliness e. Annual financial statements h. Time period assumption

c. Calendar year f. Interim financial statements i. Quarterly statements

1. presumes that an organization’s activities can be divided into specific time periods.

2. Financial reports covering a one-year period are known as .

3. A(n)consists of any 12 consecutive months.

4. A(n)consists of 12 consecutive months ending on December 31.

5. The value of information is often linked to its .

Review Apple’s balance sheet in Appendix A. Identify one asset account that requires adjustment before annual financial statements can be prepared. What would affect the income statement if this asset account were not adjusted? (Number not required, but comment on over-or understating of net income.)

Adjusting entries affect at least one balance sheet account and at least one income statement account.

For the entries below, identify the account to be debited and the account to be credited from the following

accounts: Cash; Accounts Receivable; Prepaid Insurance; Equipment; Accumulated

Depreciation; Wages Payable; Unearned Revenue; Revenue; Wages Expense; Insurance Expense;

Depreciation Expense. Indicate which of the accounts is the income statement account and which is

the balance sheet account.

a. Entry to record revenue earned that was previously received as cash in advance.

b. Entry to record wage expenses incurred but not yet paid (nor recorded).

c. Entry to record revenue earned but not yet billed (nor recorded).

d. Entry to record expiration of prepaid insurance.

e. Entry to record annual depreciation expense.

The ledger of Mai Company includes the following accounts with normal balances: Common Stock,

\(9,000; Dividends, \)800; Services Revenue, \(13,000; Wages Expense, \)8,400; and Rent Expense, $1,600.

Prepare the necessary closing entries from the available information at December 31.
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