Petra, Inc. has $400,000 in current assets, $1.25 million in plant and equipment

Question

Petra, Inc. has $400,000 in current assets, $1.25 million in plant and equipment, and $250,000 in goodwill. In what order should these assets be reported on the balance sheet?

A) plant and equipment, currents assets, goodwill

B) goodwill, plant and equipment, current assets

C) there is no correct ordering of these assets on the balance sheet

D) current assets, plant and equipment, goodwill

A) plant and equipment, currents assets, goodwill

B) goodwill, plant and equipment, current assets

C) there is no correct ordering of these assets on the balance sheet

D) current assets, plant and equipment, goodwill

Explanation / Answer

In Balance Sheet the order of reporting is:

1. Current Assets

2. Fixed Assets

3. Intangible Assets

The order of reporting in this question would be current assets, plant and equipment and goodwil. Plant and Machinery is a fixed asset. Goodwill is intangible asset.

The correct answer is D) current assets, plant and equipment, goodwill

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