Classified Balance Sheet

Question

The following accounts appear in an adjusted trial balance of Bridgewater Consulting. Indicate whether each account would be reported in the Current asset; Property, plant, and equipment; Current liabilities; Long-term liabilities; or Stockholders' equity section of the December 31, 20Y0, balance sheet of Bridgewater Consulting.

Line Item Description Classification
1. Accounts Payable
2. Accounts Receivable
3. Accumulated Depreciation—Building
4. Cash
5. Common Stock
6. Note Payable (due in ten years)
7. Supplies
8. Wages Payable

Answer 1

Based on the classifications you provided, here’s how each account would be reported in the balance sheet of Bridgewater Consulting for December 31, 20Y0:

| Line Item Description | Classification | |------------------------------------------------|------------------------------| | 1. Accounts Payable | Current Liabilities | | 2. Accounts Receivable | Current Assets | | 3. Accumulated Depreciation—Building | Property, Plant, and Equipment (contra-asset account) | | 4. Cash | Current Assets | | 5. Common Stock | Stockholders' Equity | | 6. Note Payable (due in ten years) | Long-term Liabilities | | 7. Supplies | Current Assets | | 8. Wages Payable | Current Liabilities |

Summary of Classifications:

• Current Assets:

  • Accounts Receivable
  • Cash
  • Supplies

• Property, Plant, and Equipment:

  • Accumulated Depreciation—Building (as a contra-account subtracted from the total value of the building in that section)

• Current Liabilities:

  • Accounts Payable
  • Wages Payable

• Long-term Liabilities:

  • Note Payable (due in ten years)

• Stockholders' Equity:

  • Common Stock