Wishbone, Inc., is preparing its year-end balance sheet and needs to determine how much of its assets/liabilities are current or noncurrent. For the following transactions, determine the amount that needs to be included in the balance sheet for the period ending December 31, Year 7, as current or noncurrent. Wishbone paid $16,000 for insurance on October 1, Year 6. Insurance is $500 per month due on the last day of the month. Wishbone pays its employees the Wednesday following the close of the 2-week pay period. Wishbone has 15 employees who each work 40 hours per week for $10 per hour. In Year 7, December 31 is the second Friday of a 2-week pay period. Wishbone has a $10,000 deferred tax asset recorded on its books as of December 31, Year 7. Wishbone expects $3,000 to be reversed in Year 8. During Year 7, Wishbone invested $6,000 in trading securities. It expects to sell half in Year 8 and the remaining half in Year 9. Wishbone purchased new equipment for $15,000 on January 1, Year 6. The equipment has a useful life of 10 years and has no salvage value. Wishbone depreciates its equipment using the straight-line method. Complete Wishbone's December 31, Year 7, balance sheet using the information above. Enter the appropriate amounts in the associated cells. Enter all amounts as positive values. If no entry is necessary, enter a zero (0) or leave the cell blank. Entry Current Noncurrent 1. Prepaid insurance 2. Wages payable 3. Deferred tax asset 4. Investment in trading securities 5. Equipment (net of accumulated depreciation)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Wishbone, Inc., is preparing its year-end balance sheet and needs to determine how much of its assets/liabilities are current or noncurrent. For the following transactions, determine the amount that needs to be included in the balance sheet for the period ending December 31, Year 7, as current or noncurrent.

Wishbone paid $16,000 for insurance on October 1, Year 6. Insurance is $500 per month due on the last day of the month.
Wishbone pays its employees the Wednesday following the close of the 2-week pay period. Wishbone has 15 employees who each work 40 hours per week for $10 per hour. In Year 7, December 31 is the second Friday of a 2-week pay period.
Wishbone has a $10,000 deferred tax asset recorded on its books as of December 31, Year 7. Wishbone expects $3,000 to be reversed in Year 8.
During Year 7, Wishbone invested $6,000 in trading securities. It expects to sell half in Year 8 and the remaining half in Year 9.
Wishbone purchased new equipment for $15,000 on January 1, Year 6. The equipment has a useful life of 10 years and has no salvage value. Wishbone depreciates its equipment using the straight-line method.

Complete Wishbone's December 31, Year 7, balance sheet using the information above. Enter the appropriate amounts in the associated cells. Enter all amounts as positive values. If no entry is necessary, enter a zero (0) or leave the cell blank.

Entry	Current	Noncurrent
1. Prepaid insurance
2. Wages payable
3. Deferred tax asset
4. Investment in trading securities
5. Equipment (net of accumulated depreciation)

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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