Jimenez Transportation purchased five new transportation vehicles in 2021. They plan to pay these vehicles off...
Jimenez Transportation purchased five new transportation vehicles in 2021. They plan to pay these vehicles off in even installments over the next 8 years. On the 2022 year-end financial statements, how would the amount Jimenez plans to pay off in 2023 differ from the amount they plan to pay off in 2024?
A ) The amount they plan to pay off in 2023 would be classified as depreciation, and the amount they plan to pay off in 2024 would be classified as a long-term liability.
B) The amount they plan to pay off in 2023 would be classified as property, plant, and equipment, and the amount they plan to pay off in 2024 would be classified as a long-term investment. C) The amount they plan to pay off in 2023 would be classified as a current liability, and the amount they plan to pay off in 2024 would be classified as a long-term investment.
D) The amount they plan to pay off in 2023 would be classified as a current liability, and the amount they plan to pay off in 2024 would be classified as a long-term liability.
What is the answer and why?
Homework Answers
The Correct Answer is Option D.
D) The amount they plan to pay off in 2023 would be classified as a current liability, and the amount they plan to pay off in 2024 would be classified as a long-term liability.
Why?
Any Liability which shall be paid within 12 months is considered as a current liability. Liabilities payable after a period of 12 months can be termed as Long-term liabilities.
In this case, Jimenez Transportation has recognized a liability for payment of the cost of Vehicles. At the end of 2022, a portion of liability that needs to be paid in 2023 (within 12 months from the end of 2022) will be termed as a current liability, the remaining portion which will be paid after 2023 (after 12 months from the end of 2022) can be termed as Long-term liability.
Option A is incorrect because Depreciation is a reduction in the value of an asset, not a liability to be paid.
Option B is incorrect because Asset is classified as Property, Plant, and Equipment at the time of acquisition and addition.
Option C is incorrect because the Amount to be paid in 2024 is still a liability and can not be termed as Lon-term investment.
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Jimenez Transportation purchased five new transportation
vehicles in 2021. They plan to pay these vehicles off...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Debits 75,000 190,000 131,000 39,000 219,000 44,000 20,000 284,000 1,590,000 641,000 156,000 44,000 270,000 16,000 Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation- building Accumulated depreciation- equipment Accounts payable Dividends payable (payable on 1/16/2022) Int est payable Income Taxes payable...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2822) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation equipment Accounts payable Dividends payable (payable on 1/16/2822) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Connon stock Retained earnings Totals Debits Credits 69, eee 184,800...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2922) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 69, eee 184,...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 71,000 186,000 127,000 37,000...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31,
2021, for the Vosburgh Electronics Corporation.
Account Title
Debits
Credits
Cash
83,000
Short-term investments
198,000
Accounts receivable
139,000
Long-term investments
43,000
Inventory
223,000
Receivables from employees
48,000
Prepaid expenses (for 2022)
24,000
Land
288,000
Building
1,630,000
Equipment
645,000
Patent (net)
160,000
Franchise (net)
48,000
Notes receivable
290,000
Interest receivable
20,000
Accumulated depreciation—building
628,000
Accumulated depreciation—equipment
218,000
Accounts payable
197,000
Dividends payable (payable on 1/16/2022)
18,000
Interest payable
24,000
Income...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 69,800 184, eee 125,...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 69,800 184, eee 125,...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 103,000 218,000 159,000 53,000...
The following is the ending balances of accounts at December 31, 2021, for the Velectronics Corporation....
The following is the ending balances of accounts at December 31, 2021, for the Velectronics Corporation. Account Title Debits Credits Cash 81,000 Short-term investments 196,000 Accounts receivable 137,000 Long-term investments 42,000 Inventory 222,000 Receivables from employees 47,000 Prepaid expenses (for 2022) 23,000 Land 287,000 Building 1,620,000 Equipment 644,000 Patent (net) 159,000 Franchise (net) 47,000 Notes receivable 285,000 Interest receivable 19,000 Accumulated depreciation—building 627,000 Accumulated depreciation—equipment 217,000 Accounts payable 196,000 Dividends payable (payable on 1/16/2022) 17,000 Interest payable 23,000 Income Taxes...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Account Title Debits Credits Cash 85,000 Short-term investments 200,000 Accounts receivable 141,000 Long-term investments 44,000 Inventory 224,000 Receivables from employees 49,000 Prepaid expenses (for 2022) 25,000 Land 289,000 Building 1,640,000 Equipment 646,000 Patent (net) 161,000 Franchise (net) 49,000 Notes receivable 295,000 Interest receivable 21,000 Accumulated depreciation—building 629,000 Accumulated depreciation—equipment 219,000 Accounts payable 198,000 Dividends payable (payable on 1/16/2022) 19,000 Interest payable 25,000 Income...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Debits 75,000 190,000 131,000 39,000 219,000 44,000 20,000 284,000 1,590,000 641,000 156,000 44,000 270,000 16,000 Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation- building Accumulated depreciation- equipment Accounts payable Dividends payable (payable on 1/16/2022) Int est payable Income Taxes payable...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2822) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation equipment Accounts payable Dividends payable (payable on 1/16/2822) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Connon stock Retained earnings Totals Debits Credits 69, eee 184,800...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2922) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 69, eee 184,...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 71,000 186,000 127,000 37,000...
The following is the ending balances of accounts at December 31,
2021, for the Vosburgh Electronics Corporation.
Account Title
Debits
Credits
Cash
83,000
Short-term investments
198,000
Accounts receivable
139,000
Long-term investments
43,000
Inventory
223,000
Receivables from employees
48,000
Prepaid expenses (for 2022)
24,000
Land
288,000
Building
1,630,000
Equipment
645,000
Patent (net)
160,000
Franchise (net)
48,000
Notes receivable
290,000
Interest receivable
20,000
Accumulated depreciation—building
628,000
Accumulated depreciation—equipment
218,000
Accounts payable
197,000
Dividends payable (payable on 1/16/2022)
18,000
Interest payable
24,000
Income...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 69,800 184, eee 125,...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 69,800 184, eee 125,...
The following is the ending balances of accounts at December 31, 2021, for the Vosburgh Electronics Corporation. Credits Account Title Cash Short-term investments Accounts receivable Long-term investments Inventory Receivables from employees Prepaid expenses (for 2022) Land Building Equipment Patent (net) Franchise (net) Notes receivable Interest receivable Accumulated depreciation-building Accumulated depreciation-equipment Accounts payable Dividends payable (payable on 1/16/2022) Interest payable Income Taxes payable Deferred revenue Notes payable Allowance for uncollectible accounts Common stock Retained earnings Totals Debits 103,000 218,000 159,000 53,000...
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