Summary Business Accounting

Question:

Cone Corporation is in the process of preparing its December 31, 2013, balance sheet. There are some

questions as to the proper classification of the following items: a. $50,000 in cash set aside in a savings

account to pay bonds payable. The bonds mature in 2017.

b. Prepaid rent of $24,000, covering the period January 1, 2014, through December 31, 2015.

c. Note payable of $200,000. The note is payable in annual installments of $20,000 each, with the first

installment payable on March 1, 2014.

d. Accrued interest payable of $12,000 related to the note payable.

e. Investment in marketable securities of other corporations, $80,000. Cone intends to sell one-half of the

securities in 2014.

Required:

Prepare a partial classified balance sheet to show how each of the above items should be reported.



Answer:



CONE CORPORATION

Balance Sheet (Partial)

At December 31, 2013



Assets

Current assets:

Marketable securities ............................................................. $ 40,000

Prepaid rent ............................................................................ 12,000



Investments: