Classification of Assets and Liabilities -
Darin Development Company engaged in the following transactions during the current year.
1. Borrowed $400,000 from Pleasantville Community Bank at the beginning of the year. The terms of the note call for annual payments of $50,000. The first annual payment has not been paid as of the end of the current year. (Ignore any interest payable.)
2. Made sales for the current year amounting to $2,900,000 with 40% collected during the current year.
3. Acquired inventory costing $345,000 on account.
4. Incurred taxes due on the current year's income of $76,000.
5. Paid $60,000 for a three-year insurance policy in advance at the beginning of the current year.
6. Acquired new equipment costing $890,000 by borrowing the full amount at the end of the current year. The loan is due in 5 years.
Required - Identify and classify the noncash assets and liabilities resulting from the current-year transactions. Assume that your classification is made as of the end of the current year.
Gordon, Elizabeth A., Jana Raedy, Alexander Sannella. Intermediate Accounting. Pearson Learning Solutions, 05/2016. VitalBook file.