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: $70,000 in cash restricted in a savings account to pay bonds payable. The bonds mature in 2025. Prepaid rent of $44,000, covering the period January 1, 2022, through December 31, 2023. Notes payable of $240,000. The notes are payable in annual installments of $40,000 each, with the first installment payable on March 1, 2022. Accrued interest payable of $32,000 related to the notes payable. Investment in equity securities of other corporations, $120,000. 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.

The Partial Classified Balance Sheet of Cone Corporation for as December 31, 2021 is shown in the explanations.

Explanation:

The Question is to prepare the Assets and teh Liability Sections of a Classifed Balance Sheet for Cone Corporation

Cone Corporation

Balance Sheet (Classified)

As at December 31, 2021

                              ASSETS                                Amount (S)

Current Assets:

Marketable Securities                                       60,000

Prepaid Rent                                                      22,000

Investments

Bond Sinking Fund                                           70,000

Marketable Securities                                       60,000

Other Assets:

Prepaid Rent                                                      22,000

                          LIABILITIES AND EQUITY

Current Liabilities

Interest Payable                                                32,000

Current Maturities of Long-Term Debt            40,000

Long Term Liabilities

Notes payable                                                  200,000

Notes:

1) The Prepaid rent only reports half as current assets (usable within the next one year), the next half of $22,000 becomes other assets

2) The The Notes payable is in stallments, and the instalment due in 2022 is $40,000,  hence the balanc e(240,000- 40,000) 200,000 will go into notes payable remaining amount

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