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Chapter 2: Q13BP (page 50)

Classify the following balance sheet items as current or noncurrent:

Retained earning

Bond payable

Accounts payable

Accrued wages payable

Prepaid expenses

Accounts receivable

Plant and equipment

Capital in excess of par

Inventory

Preferred stock

Common stock

Marketable security

Short Answer

Expert verified

Current asset means the assets which can reasonably be expected to be realizable within a year or during the normal operating cycle of the business.

Step by step solution

01

Non-current assets

The non-current assets mean the assets which can not be expected to be realized in the normal operating cycle or within one year.

02

Classification of balance sheet item as current or non-current

Particulars

Classification

Retained earnings

NA

Bonds payable

Non-current

Accounts payable

Current

Accrued wages payable

Current

Prepaid expenses

Current

Accounts receivable

Current

Plant and equipment

Non-current

Capital in excess of par

NA

Inventory

Current

Preferred stock

NA

Common stock

NA

Marketable security

Current

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Most popular questions from this chapter

Perez Corporation has the following financial data for the years 20X1 and 20X2:

20X1

20X2

Sales

\(8,000,000

\)10,000,000

Cost of goods sold

6,000,000

9,000,000

Inventory

800,000

1,000,000

b. Compute inventory turnover based on an alternative calculation that is used by many financial analysts, Cost of goods sold/Inventory, for each year.

What is the difference between book value per share of common stock and market value per share? Why does this disparity occur?

Explain how depreciation generates actual cash flows for the company.

Nova Electrics anticipates cash flow from operating activities of \(6 million in 20X1. It will need to spend \)1.2 million on capital investments to remain

competitive within the industry. Common stock dividends are projected at

\(.4 million and preferred stock dividends at \).55 million.

a. What is the firm’s projected free cash flow for the year 20X1?

b. What does the concept of free cash flow represent?

Indicate if there is an improvement or decline in total asset turnover, and based on the other ratios, indicate why this development has taken place.
See all solutions

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