Balance Sheet Component Matching Solution

Balance Sheet Component Matching Solution Strictly Confidential
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Balance Sheet Component Matching Solution
A company has the following balance sheet accounts:
Account Description
Accounts receivable Customers who have purchased on credit – ac
Income taxes payable Corporate taxes for the period that must be re
Long-term debt Borrowing for business – one or multiple loans
Contingencies A potential future liability that the company ca
Property, plant & equipment Physical assets used to generate income over
Inventory Goods either purchased or produced for sale to
Current portion of capital lease obligation The amount owing over the next 12 months fo
Cash and equivalents Cash or items that act like cash (eg, short term
Common shares/stock Shares held by investors in the company. The
Current portion of long-term debt The amount of any loan(s) repayments due wi
Goodwill The premium paid on the acquisition of anothe
Deferred income tax assets (expected to reverse in 12 monthA timing difference due to the difference betw
Unearned revenue Revenues that have been collected from custo
Accounts payable Supplier invoices that relate to the current rep
Retained earnings The accumulated profits and losses of the busi
Intangible assets Long term assets of the business that have no
Capital lease obligation Capital leases are leases that are related to sp
Accrued liabilities Liabilities that are related to the current repor
Prepaid expenses Expenses that have been incurred where the s
Preferred shares/stock Shares purchased by investors that have fixed
Requirements:
Part I. Provide a brief description of what each account contains.
Part II. Using the attached template, place the accounts in the appropriate place on the balance
Balance Sheet
Assets Liabilities
Current assets: Current liabilities:
Cash and equivalents Accounts payable
Accounts receivable Accrued liabilities
Inventory Unearned revenue
Prepaid expenses Income taxes payable
Deferred income tax asset Current portion of long-term debt
Total current assets Current portion of capital lease obligation
Total current liabilities
Non-current assets:
Property, plant & equipment Non-current liabilities:
Goodwill Long term debt
Intangible assets Capital lease obligation
Total non-current assets Contingencies
Total non-current liabilities
Shareholders' equity
Common stock
Preferred stock
Retained earnings
Total assets Total liabilities and shareholders' equity

purchased on credit – accounts to be collected.
e period that must be remitted to government.
s – one or multiple loans where term is longer than 12 months.
ility that the company can reasonably estimate (eg, from a pending lawsuit)
o generate income over a period of time greater than 12 months. Include things such as buildings, furniture, computers, v
ed or produced for sale to customers.
er the next 12 months for capital lease payments.
like cash (eg, short term money market funds) that a business holds.
ors in the company. These shares allow for voting rights and participation in profits.
an(s) repayments due within the next 12 month period.
the acquisition of another business.
ue to the difference between accounting income and taxable income. Difference will reverse in the next reporting period.
een collected from customers but have not yet been earned by the company (eg, performance of service has not yet occu
relate to the current reporting period but that have not yet been paid.
fits and losses of the business since inception. If the company has more losses than profit, then this would be stated as “re
he business that have no physical substance. Examples include licences, patents and trademarks.
ses that are related to specific assets. They act the same as a loan – except instead of borrowing money to purchase the it
ated to the current reporting period but have not been paid. Typical accrued liabilities include compensation, audit and leg
een incurred where the service has not as yet been “earned”/delivered. Typical prepaid expenses include insurance, rent
nvestors that have fixed dividends that have a priority over common shareholders.
e place on the balance sheet.
g-term debt
ital lease obligation
shareholders' equity
ldings, furniture, computers, vehicles, manufacturing equipment.
in the next reporting period.

ce of service has not yet occurred, or product has not yet been delivered).
en this would be stated as “retained deficit”.
wing money to purchase the item outright, the company leases the asset – but all the benefits of ownership are substantial
e compensation, audit and legal fees.
enses include insurance, rent and utilities.
ership are substantially transferred through the lease.

Balance Sheet Component Matching Solution

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Balance Sheet Component Matching Solution Strictly Confidential

© 2019 CFI Education Inc.

Part I. Provide a brief description of what each account contains.

Total assets Total liabilities and shareholders' equity

e place on the balance sheet.

in the next reporting period.

en this would be stated as “retained deficit”.

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