You have been asked to review the December 31, 2013, balance sheet for Champion

Question

You have been asked to review the December 31, 2013, balance sheet for Champion Cleaning. After completing your review, you list the following three items for discussion with your superior: 1. An investment of $36,000 is included in current assets. Management has indicated that it has no intention of liquidating the investment in 2014. 2. A $160,000 note payable is listed as a long-term liability, but you have determined that the note is due in 10, equal annual installments with the first installment due on March 31, 2014. 3. Unearned revenue of $78,000 is included as a current liability even though only two-thirds will be earned in 2014. Determine the appropriate amount and classification of each of the following items (in order of liquidity). Items Amounts Classifications 1. Investment 2. Next year

Explanation / Answer

Items Amounts Classification Investment 36000 Non-Current assets Next year

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