Answer
First, unclaimed payroll checks should not be categorized as current assets. Second, Long-term investments should follow current assets. Third, the fair value amount (of 30,000) should be used in the case of debt investments. The title ‘tangible’ assets should be replaced by property, plant and equipment. The sinking fund which is categorized as “other assets” should be under long-term investments. The treasury stock should not be a long-term investment; it forms part of shareholders’ equity. Finally, “discount on bonds payable” should not be categorized under “other assets”; it is a liability.
Work Step by Step
First, unclaimed payroll checks should not be categorized as current assets. Second, Long-term investments should follow current assets. Third, the fair value amount (of 30,000) should be used in the case of debt investments. The title ‘tangible’ assets should be replaced by property, plant and equipment. The sinking fund which is categorized as “other assets” should be under long-term investments. The treasury stock should not be a long-term investment; it forms part of shareholders’ equity. Finally, “discount on bonds payable” should not be categorized under “other assets”; it is a liability.
