Question

E13–21 - Disclosures of liabilities 

Required:

Indicate (by letter) the way each of the items listed below should be reported in a 

balance sheet at December 31, 2011.

Exercise 13-21

Item Reporting Method

 1. Commercial document. N. Not documented

 2. Noncommitted credit line. C. Current liability

_ 3. Customer advances. L. Long-term debt 

 4. Approximated warranty cost. D. Disclosure note only 

 5. Accounts due. A.  Asset

 6. Long-term bonds which will be callable by the lender in the next year until an existing breach isn’t fixed (there’s a realistic likelihood the breach will be fixed within the grace period).

 7. Note payable March 3, 2012.

_ 8. Interest accrued on note, Dec. 31, 2011. 

 9. Short-term bank loan to be paid with proceeds of sale of ordinary shares.

10. A determinable profit which is dependent on a future event which seems   quite likely to happen in 3 months. 

11. Unasserted evaluation of back taxes which possibly will be asserted, in which case there would probably be a loss within six months. 

 12. Unasserted assessment of back taxes with a realistic likelihood of being asserted, in which case there would probably be a loss within 13 months.

 13. A determinable loss from a earlier event which is dependent on a future event which seems quite likely to happen within 3 months. 

 14. Bond sinking fund.

15. Long-term bonds callable by the creditor in the next year which aren’t expected to be called.