Question

Exercise 3-8 (Algo) Balance sheet; current versus long-term classification [LO3-2, 3-3] Cone Corporation is in the process of preparing its December 31, 2021, balance sheet. There are some questions as to the proper classification of the following items: a. $59,000 in cash restricted in a savings account to pay bonds payable. The bonds mature in 2025. b. Prepaid rent of $33,000, covering the period January 1, 2022, through December 31, 2023. C. Notes payable of $218,000. The notes are payable in annual installments of $29,000 each with the first installment payable on March 1, 2022 d. Accrued interest payable of $21,000 related to the notes payable. e. Investment in equity securities of other corporations, $98,000. Cone intends to sell one-half of the securities in 2022. Required: Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported. CONE CORPORATION Balance Sheet (Partial) At December 31, 2021 Assets Current assets Investments

Answer 1

Cone Corporation
Balance Sheet(Partial)
At December 31, 2021
Assets
Current Assets:
Prepaid Rent	$       16,500
Savings Account	$       59,000
Investments:
Non Current Investments	$       49,000
Other Assets:
Rent Prepaid	$       16,500
Liabilities and Shareholder's Equity
Current Liabilities
Accrued Interest	$       21,000
Notes Payable	$       29,000
Long Term Liabilies
Notes Payable	$   1,89,000