Problem #1: D. Decker, controller of UWW Corporation, is currently preparing the 2018 financial statements. She is trying to decide how to classify the following items: 1. Accounts payable of $158,000 owed to suppliers for inventory. 2. A $66,000 note payable that matures in three months. The company is planning to acquire a five-year loan from its bank to pay off the note. The bank has agreed to finance the note. 3. A $500,000 mortgage on real estate: $67,000 is payable within twelve months, and the remaining $433,000 it to be paid over the next six years. 4. Advances of $23,000 cash received from a customer. The contract between the customer and Uww Corp states that the company must deliver goods within a six month time period or the $23,000 is to be returned to the customer. 5. The sum of $7,000 owed to the phone company for service during December. 6. The sum of $16,000 due to the federal government for income tax withheld from employees during the last quarter of 2017. The government requires withholdings be submitted by the end of the next quarter to the Internal Revenue Service. 7. A$126,000 note payable: $33,000 is payable within 12 months, and the remaining $93,000 is to be paid over the next two years. Uww Corp. plans to issue common stock to the creditor for the portion due during the next 12 months. 8. The company declared a cash dividend of $48,000 on December 29, 2017 to be paid January 9. 21, 2018. Required: Classify each item as current or long term and identify the dollar amount for each. Note: Some items may be classified partially as current and partially long term. Current Liability Long term Liability Item 1 2 4 6 7 8
Problem #1: D. Decker, controller of UWW Corporation, is currently preparing the 2018 financial statements. She is trying to decide how to classify the following items: 1. Accounts payable of $158,000 owed to suppliers for inventory. 2. A $66,000 note payable that matures in three months. The company is planning to acquire a five-year loan from its bank to pay off the note. The bank has agreed to finance the note. 3. A $500,000 mortgage on real estate: $67,000 is payable within twelve months, and the remaining $433,000 it to be paid over the next six years. 4. Advances of $23,000 cash received from a customer. The contract between the customer and Uww Corp states that the company must deliver goods within a six month time period or the $23,000 is to be returned to the customer. 5. The sum of $7,000 owed to the phone company for service during December. 6. The sum of $16,000 due to the federal government for income tax withheld from employees during the last quarter of 2017. The government requires withholdings be submitted by the end of the next quarter to the Internal Revenue Service. 7. A$126,000 note payable: $33,000 is payable within 12 months, and the remaining $93,000 is to be paid over the next two years. Uww Corp. plans to issue common stock to the creditor for the portion due during the next 12 months. 8. The company declared a cash dividend of $48,000 on December 29, 2017 to be paid January 9. 21, 2018. Required: Classify each item as current or long term and identify the dollar amount for each. Note: Some items may be classified partially as current and partially long term. Current Liability Long term Liability Item 1 2 4 6 7 8
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem #1:
D. Decker, controller of UWw Corporation, is currently preparing the 2018 financial statements. She is trying
to decide how to classify the following items:
1. Accounts payable of $158,000 owed to suppliers for inventory.
2. A $66,000 note payable that matures in three months. The company is planning to acquire a five-year
loan from its bank to pay off the note. The bank has agreed to finance the note.
3. A $500,000 mortgage on real estate: $67,000 is payable within twelve months, and the remaining
$433,000 it to be paid over the next six years.
4. Advances of $23,000 cash received from a customer. The contract between the customer and UWW
Corp states that the company must deliver goods within a six month time period or the $23,000 is to be
returned to the customer.
5. The sum of $7,000 owed to the phone company for service during December.
6. The sum of $16,000 due to the federal government for income tax withheld from employees during the
last quarter of 2017. The government requires withholdings be submitted by the end of the next quarter
to the Internal Revenue Service.
7. A$126,000 note payable: $33,000 is payable within 12 months, and the remaining $93,000 is to be paid
over the next two years. Uww Corp. plans to issue common stock to the creditor for the portion due
during the next 12 months.
8. The company declared a cash dividend of $48,000 on December 29, 2017 to be paid January
9. 21, 2018.
Required: Classify each item as current or long term and identify the dollar amount for each. Note: Some
items may be classified partially as current and partially long term.
Current Liability
Long term Liability
Item
2
3
6
7
8
5.
00
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