37. Valuation of Balance Sheet Items Use the code letters listed below (a -1) to
ID: 2567141 • Letter: 3
Question
37. Valuation of Balance Sheet Items Use the code letters listed below (a -1) to indicate, for each balance sheet item (1 13) listed below the usual valuation reported on the balance sheet A 1. Common stock 8, Long-term bonds payable 9. Land (in use) 10. Land (future plant site) 11. Patents 12. Equity investments (trading) 2. Prepaid insurance 3, Natural resources 4. Property, plant, and equipment 5. Accounts receivable 6. Copyrights 7. Inventory 13. Accounts payable a. Par value b. Current cost of replacement c. Amount payable when due, less unamortized discount or plus unamortized premium d. Amount payable when due e. Market value at balance sheet date f. Net realizable value g. Lower of cost or market h. Original cost less accumulated amortization i. Original cost less accumulated depletion j. Original cost less accumulated depreciation k. Historical cost I. Unexpired or unconsumed costExplanation / Answer
2. Prepaid insurance -( l)unexpired or unconsumed cost because it is the future liability which has been paid off in advance
5. Accounts receivable -( f) net realizable value. It means full amount receivable less provision for any bad or doubtful debts
6. Copyright -( h)original cost less accumulated amorization. However, this is done only for purchased asset and not internally generated asset.
9. Land in use - (k) historical cost since fair value/ market value is not necessarily reliable and may also change in different situations like auctions
10. Land future plant site (k) historical cost
11. Patents -( h) original cost less accumulated amorization. However, this is done only for purchased asset and not internally generated asset.
12. Equity investment - (e) Market vakue at balance sheet date. Difference of cost and this market value is identified as unrealized gains or losses in income statement.
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