Exercise NO: 1

Presented below are various account balances of K.D. Lang Inc.\n(a) Unamortized premium on bonds payable, of which $3,000 will be amortized during the

Presented below are various account balances of K.D. Lang Inc.

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(a) Unamortized premium on bonds payable, of which $3,000 will be amortized during the next year.

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(b) Bank loans payable of a winery, due March 10, 2018. (The product requires aging for 5 years before sale.)

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(c) Serial bonds payable, $1,000,000, of which $200,000 are due each July 31.

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(d) Amounts withheld from employees’ wages for income taxes.

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(e) Notes payable due January 15, 2017.

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(f) Credit balances in customers’ accounts arising from returns and allowances after collection in full of account.

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(g) Bonds payable of $2,000,000 maturing June 30, 2016.

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(h) Overdraft of $1,000 in a bank account. (No other balances are carried at this bank.)

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(i) Deposits made by customers who have ordered goods.

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Instructions

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Indicate whether each of the items above should be classified on December 31, 2014, as a current liability, a long-term liability, or under some other classification. Consider each one independently from all others; that is, do not assume that all of them relate to one particular business. If the classification of some of the items is doubtful, explain why in each case.

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