181
E6–13
a. The asset categories reflect the life cycle of a film. The initial “In develop-
ment” costs are associated with efforts to develop a new film. These costs
b. The description above sounds similar to a manufacturing firm. Raw materials
(in development) are transferred to work in process (in process), then to fi-
E6–14
182
E6–15
Cost
Ending Cost of Goods
Inventory Method Inventory Sold
Cost of merchandise available for sale:
a. First-in, first-out:
Inventory:
15 units at $2,100 …………………………………………….. $ 31,500
b. Last-in, first-out:
183
E6–16
E6–17
1. The interest receivable should be reported separately as a current asset. It
should not be deducted from notes receivable.
2. The allowance for doubtful accounts should be deducted from accounts
receivable.
A corrected partial balance sheet would be as follows:
ZABEL COMPANY
Balance Sheet
December 31, 20Y4
Assets
184
E6–18
Product Inventory
Quantity
Cost
per
Unit
Market
Value per
Unit (Net
Realizable
Value)
Total
Cost Market LCM
E6–19
The inventory would appear in the Current Assets section, as follows:
185
PROBLEMS
P6–1
1.
A B C D E F G H
1 Aging-of-Receivables Schedule
2 December 31, 20Y7
3 Days Past Due
4 Customer Balance Not Past
Due 1–30 31–60 61–90 91–120
Over
120
2.
Balance Sheet
Statement of Assets =Liabilities +Stockholders’ Equity Income
Cash Flows Allowance for Retained Statement
– Doubtful Accounts = Earnings
186
P6–1, Continued
3.
Balance Sheet
Statement of Assets =Liabilities +Stockholders’ Equity Income
Cash Flows Allowance for Retained Statement
– Doubtful Accounts = Earnings
20Y7
20Y7
4.
Balance Sheet
Statement of Assets =Liabilities +Stockholders’ Equity Income
Cash Flows Accounts Allowance for Statement
Receivable – Doubtful Accounts
20Y8
187
P6–1, Continued
5.
Reinstated Account
Balance Sheet
Statement of Assets =Liabilities +Stockholders’ Equity Income
Cash Flows Accounts Allowance for Statement
Receivable – Doubtful Accounts
Collected $2,950
Balance Sheet
Statement of Assets =Liabilities +Stockholders’ Equity Income
Cash Flows Accounts Statement
Cash + Receivable
20Y8
6. a.
Wrote-off of Account
Balance Sheet
Statement of Assets =Liabilities +Stockholders’ Equity Income
Cash Flows Retained Statement
Accounts Receivable = Earnings
20Y8
20Y8
188
P6–1, Concluded
6. b.
Reinstated Account
Balance Sheet
Statement of Assets =Liabilities +Stockholders’ Equity Income
Cash Flows Retained Statement
Accounts Receivable = Earnings
Collected $2,950
Balance Sheet
Statement of Assets =Liabilities +Stockholders’ Equity Income
Cash Flows Accounts Statement
Cash + Receivable
20Y8