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Chapter 3: Q7(15)PSB (page 160)

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.
A. Current assets E. Current liabilities
B. Long-term investments F. Long-term liabilities
C. Plant assets G. Equity
D. Intangible assets
15. Office supplies

Short Answer

Expert verified

The correct answer isC, Plant assets.

Step by step solution

01

Definition of office supplies

Office supplies are the equipment that can be used in offices by organizations by individuals engaged in written communications, and record keeping. It is an asset for the organization.

02

Reason for choice

The equipment is one of the fixed asset that must be depreciated using an appropriate method of depreciation. Hence, it should be disclosed under the plant asset section of the balance sheet.

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Most popular questions from this chapter

For each of the following separate cases, prepare adjusting entries required of financial statements for

the year ended (date of) December 31, 2017. (Entries can draw from the following partial chart of

accounts:

Cash; Interest Receivable; Supplies; Prepaid Insurance; Equipment; Accumulated

Depreciation—Equipment; Wages Payable; Interest Payable; Unearned Revenue; Interest Revenue;

Wages Expense; Supplies Expense; Insurance Expense; Interest Expense; Depreciation Expense—

Equipment.)

a. Wages of \(8,000 are earned by workers but not paid as of December 31, 2017.

b. Depreciation on the company’s equipment for 2017 is \)18,000.

c. The Office Supplies account had a \(240 debit balance on December 31, 2016. During 2017, \)5,200 of

office supplies are purchased. A physical count of supplies at December 31, 2017, shows \(440 of supplies

available.

d. The Prepaid Insurance account had a \)4,000 balance on December 31, 2016. An analysis of insurance

policies shows that \(1,200 of unexpired insurance benefits remain at December 31, 2017.

e. The company has earned (but not recorded) \)1,050 of interest from investments in CDs for the year

ended December 31, 2017. The interest revenue will be received on January 10, 2018.

f. The company has a bank loan and has incurred (but not recorded) interest expense of $2,500 for the

year ended December 31, 2017. The company must pay the interest on January 2, 2018.

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets E. Current liabilities

B. Long-term investments F. Long-term liabilities

C. Plant assets G. Equity

D. Intangible assets

18. Notes receivable (due in 120 days)

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets E. Current liabilities

B. Long-term investments F. Long-term liabilities

C. Plant assets G. Equity

D. Intangible assets

5. Machinery

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets E. Current liabilities

B. Long-term investments F. Long-term liabilities

C. Plant assets G. Equity

D. Intangible assets

4. Prepaid insurance

Prepare adjusting journal entries for the year ended (date of) December 31, 2017, for each of these separate situations.

(Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Supplies;

Prepaid Insurance; Equipment; Accumulated Depreciation—Equipment; Wages Payable; Unearned Revenue;

Revenue; Wages Expense; Supplies Expense; Insurance Expense; Depreciation Expense—Equipment.)

a. Depreciation on the company’s equipment for 2017 is computed to be \(18,000.

b. The Prepaid Insurance account had a \)6,000 debit balance at December 31, 2017, before adjusting for

the costs of any expired coverage. An analysis of the company’s insurance policies showed that \(1,100

of unexpired insurance coverage remains.

c. The Office Supplies account had a \)700 debit balance on December 31, 2016; and \(3,480 of office

supplies were purchased during the year. The December 31, 2017, physical count showed \)300 of supplies

available.

d. Two-thirds of the work related to \(15,000 of cash received in advance was performed this period.

e. The Prepaid Insurance account had a \)6,800 debit balance at December 31, 2017, before adjusting for the

costs of any expired coverage. An analysis of insurance policies showed that \(5,800 of coverage had expired.

f. Wage expenses of \)3,200 have been incurred but are not paid as of December 31, 2017.

See all solutions

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