Question

Valuation on the Balance Sheet. Assign the most appropriate valuation using the items below:

­­­___Bonds Payable (2 months)	1 Cash realizable value
___Prepaid Expenses	2 Lower of cost or market/FMV
___Land (in use)	3 Historical Cost
___Plant, Property and Equipment	4 Price Paid (cost), less allocated or expired costs, otherwise known as unallocated cost
___Patent that was purchased	5 Face less unamortized premium or discount
___Treasury Stock	6. Par
___Accounts Receivable
___Bonds Payable (20 years)
___Common Stock, $1 par
___Inventory

Match blank with definition by number

Answer 1

­­­_5__Bonds Payable (2 months)[ Because at the time of valuation of bonds wether payable in current year or years later , amortized premium or discount is reduced]

__4_Prepaid Expenses [allocated cost is reduced , only unallocated cost is booked]

__3_Land (in use)[Land is always recorded at historical costs]

__3_Plant, Property and Equipment[ PPE, to be recorded at historical costs unless there is case of liquidation, merger etc.]

__3_Patent that was purchased [ Patents acquired in form of purchase are valued at historical cost]

__6_Treasury Stock [ treasury stocks are valued at par like other shares in general cases]

__1_Accounts Receivable [ As provision for doubtful debts is reduced from AR, so valued at net cash realizable value]

__5_Bonds Payable (20 years) [Because at the time of valuation of bonds wether payable in current year or years later , amortized premium or discount is reduced]

__6_Common Stock, $1 par [ Common stock given at par, will be valued at par]

__2_Inventory [ inventory is always valued at cost or NRV or FMV whichever is lower]

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