Baloon-E-Tunes -Refer to Baloon-E-Tunes

question 200

Essay

Baloon-E-Tunes

$\begin{array}{l}\begin{array}{ll}\text { Retained Earnings } & \$ 370,000 \\\text { Accumulated Depreciation } & 130,000 \\\text { Income Taxes Payable } & 240,000 \\\text { Plant } & 480,000 \\\text { Cash } & 110,000 \\\text { Accounts Receivable } & 350,000 \\\text { Common Stock } & 600,000\end{array}\begin{array}{ll}\text { Notes Payable (due in } 6 \text { years) } & \$ 120,000 \\\text { Salaries Payable } & 10,000 \\\text { Supplies } & 20,000 \\\text { AccountsPayable } & 360,000 \\\text { Inventory } & 330,000 \\\text { Land } & 500,000 \\\text { Prepaid Insurance } & 40,000\end{array}\end{array}$
-Refer to Baloon-E-Tunes.Prepare the long-term asset section of the balance sheet at December 31,2013.You may omit the heading.Why are these amounts classified as "long-term"?

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Definitions:

Total Fixed Cost

The sum of all fixed expenses that a company incurs, which do not vary with production volume.

Planning Budget

A budget designed for a particular level of activity, often used for evaluating potential income and expenditures for future accounting periods.

Direct Labor

The labor costs of employees who are directly involved in the production of goods or services.

Budgeted Units

The quantity of products or services that an organization plans to produce or sell in a specific period according to its budget.