| Course | AC300 Intermediate Accounting I |
|---|---|
| Unit | Unit 3 |
| Paper type | Classified balance sheet |
| Length | About 570 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Accounting |
| Updated | October 2026 |
Free sample paper for AC300 Unit 3
Restricted Cash and Land Waiting for a Warehouse: A Unit 3 Classified Balance Sheet for a School Furniture Distributor
[Student Name]
Purdue University Global
AC300: Intermediate Accounting I
Unit 3 Classified Balance Sheet
[Instructor Name]
[Date]
Bellmont School Furnishings, Inc. and its balances are composite; the framework and standards cited are real.
Classified Balance Sheet, December 31
Current assets
1. Cash and cash equivalents: $46,200.
2. Short-term investments: $18,000.
3. Accounts receivable, $312,000, less allowance of $9,400: $302,600.
4. Inventory: $488,000.
5. Prepaid expenses: $14,800.
Total current assets: $869,600.
Long-term investments
1. Cash restricted for bond sinking fund: $60,000.
2. Land held for a future warehouse site: $240,000.
Total long-term investments: $300,000.
Property, plant and equipment
1. Land, current warehouse: $150,000.
2. Building, $920,000, less accumulated depreciation of $312,000: $608,000.
3. Equipment and delivery trucks, $286,000, less accumulated depreciation of $141,000: $145,000.
Total property, plant and equipment: $903,000.
Intangible assets
1. Purchased school district supply contracts, net of amortization: $38,000.
2. Goodwill: $95,000.
Total intangible assets: $133,000.
Total assets: $2,205,600.
Current liabilities
1. Accounts payable: $264,000.
2. Accrued wages: $31,500.
3. Income taxes payable: $22,800.
4. Deposits from school districts for summer deliveries: $48,000.
5. Current portion of note payable: $50,000.
Total current liabilities: $416,300.
Long-term liabilities
1. Bonds payable, $600,000, less unamortized discount of $12,400: $587,600.
2. Note payable, less current portion: $150,000.
Total long-term liabilities: $737,600.
Stockholders' equity
1. Common stock, $1 par: $100,000.
2. Additional paid-in capital: $420,000.
3. Retained earnings: $531,700.
Total stockholders' equity: $1,051,700.
Total liabilities and stockholders' equity: $2,205,600.
The Two Reclassifications
Restricted cash. The ledger's cash account showed $106,200, but $60,000 sits in a trust account that the bond indenture requires for retiring bonds due in eight years. Because Bellmont cannot use it for current operations, it belongs outside current assets, here with long-term investments (Kieso et al., 2019). On the statement of cash flows, the restricted balance is still included with cash when beginning and ending cash are reconciled, and the notes must describe the restriction (Financial Accounting Standards Board, 2016). So the same $60,000 is excluded from current assets yet disclosed alongside cash, which tells the reader both how much cash exists and how much of it is free to spend.
Land held for a future site. The ledger listed $390,000 of land under property, plant and equipment. Only $150,000 is the land under today's warehouse. The other $240,000, a parcel bought for a warehouse not yet planned, is not used in operations and is classified as a long-term investment.
Leaving the restricted cash in current assets would have raised the current ratio from 2.09 to 2.23, telling a lender that Bellmont had $60,000 of spendable cash it is legally barred from spending.
Other Classification Choices
School district deposits are a current liability because the furniture will be delivered in the summer, within a year. The note payable is split so that the $50,000 due next year is current. The bond discount is shown as a reduction of bonds payable. Classification exists so users can judge liquidity and financial flexibility, which is why the framework stresses presenting information in a way that is understandable and comparable (Financial Accounting Standards Board, 2018).
Checks
Total assets equal total liabilities of $1,153,900 plus equity of $1,051,700. Each contra account sits directly under the account it reduces. Every current liability is due within the operating cycle or a year.
References
Financial Accounting Standards Board. (2016). Restricted cash (Topic 230): A consensus of the FASB Emerging Issues Task Force (Accounting Standards Update No. 2016-18). https://www.fasb.org
Financial Accounting Standards Board. (2018). Conceptual framework for financial reporting: Chapter 1, The objective of general purpose financial reporting, and Chapter 3, Qualitative characteristics of useful financial information (Statement of Financial Accounting Concepts No. 8, as amended). https://www.fasb.org
Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2019). Intermediate accounting (17th ed.). Wiley.
Reading the AC 300 Unit 3 instructions
The third AC300 unit turns to the balance sheet and gives students an adjusted trial balance to arrange in classified form. Group assets as current, long-term investments, property, plant and equipment, and intangibles, and claims as current liabilities, long-term liabilities and equity. Each contra account belongs directly under the account it reduces. Split any debt that is partly due within the year. The assignment usually hides two or three accounts whose names suggest one heading but whose substance calls for another, such as restricted cash, idle land or customer deposits. Explain each of those in a short paragraph. A ratio or two shows why classification matters to a lender. Report form, stacked vertically, suits a page better than account form. Check that the statement balances before writing the explanations. Cite the textbook and any standard you rely on in APA 7.
How this AC300 Unit 3 example is built
The sample presents the full statement first, as numbered lines under seven headings with subtotals, from cash of $46,200 to retained earnings of $531,700. Receivables appear net of a $9,400 allowance, and the bonds net of a $12,400 discount. A section on the two reclassifications follows. The trust cash is explained through the bond indenture, with a note that the cash flow statement still includes restricted balances under the 2016 update. The idle parcel is separated from the $150,000 of land under the current warehouse. The highlighted sentence measures the effect on the current ratio. A shorter section covers other choices: school district deposits as a current liability, the $50,000 current portion of the note, and the bond discount. The paper ends with checks confirming total assets equal liabilities of $1,153,900 plus equity of $1,051,700.
Where the points sit in the AC300 Unit 3 rubric
AC300 graders first check whether the statement balances and whether each account sits under the right heading, and those two tests carry most of the score. Subtotals for every group are expected. Netting contra accounts correctly shows care. The written explanations earn the next block of points, particularly for any account the problem planted in the wrong place. A reclassification is credited only when the reason is stated, such as the restriction in a bond indenture, not just the move. Linking the choice to a ratio shows that classification has consequences for users. Citing the framework or textbook for the definition of current assets supports the judgment. Clean formatting, with aligned amounts and clear headings, matters on a statement that is read rather than skimmed. APA 7 references and a check section round out a complete submission for Purdue Global.
AC300 Unit 3 help: mistakes that cost points
Classified balance sheets go wrong most often on cash: students leave restricted balances in current assets because the account is called cash. Land is another trap, with land held for future use left in property, plant and equipment. Customer deposits are sometimes listed as revenue or as a reduction of receivables instead of a liability. The current portion of long-term debt is missed, which understates current liabilities and inflates the current ratio. Some papers list accounts in ledger order without group subtotals. Others subtract the bond discount from interest expense or show it as an asset. A balanced statement can still be wrong, so a short explanation of each judgment protects the grade. If your trial balance has accounts like these and you are unsure where they go, a writer can classify them and explain each placement.
Get an AC300 Unit 3 example written to your instructions
Account balances alone are not quite enough for Unit 3: classification turns on whatever the instructions say about restrictions, refinancing and debt terms, so include those with the rubric. The statement and its notes follow within 24-48h in report form unless told otherwise, and no fee applies to a first custom sample. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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AC300 Unit 3 questions, answered
Should the balance sheet be in account form or report form?
Either is acceptable unless the instructions specify. Account form places assets on the left and claims on the right; report form stacks them vertically, which suits a page or a spreadsheet better. Report form is used here so the notes can sit directly beneath the totals, and because many AC300 sections submit in a document where a wide two-column layout breaks awkwardly.
What if the trial balance has an account the textbook never classified?
Classify it by what it represents, not by its name. The cash surrender value of a life insurance policy is a long-term investment even though it sounds like cash; a customer deposit is a liability even though it arrived as cash. A footnote accompanies any account whose placement required judgment, so a grader can see the reasoning behind a less familiar line.
Where can I find a free AC300 Unit 3 sample paper?
This page offers a complete AC300 Unit 3 classified balance sheet for a composite school furniture distributor, balancing at $2,205,600, with two explained reclassifications, a ratio effect and APA 7 references.
Why is land for a future warehouse not shown as property, plant and equipment in the AC300 Unit 3 sample?
The parcel is not used in operations yet. Only land under the current warehouse is plant, so the $240,000 parcel is a long-term investment until the new building is put to use.
Where does sinking fund cash go on the AC300 Unit 3 balance sheet?
Bellmont's $60,000 sits in a trust that the bond indenture reserves for retiring bonds in eight years, so it is shown with long-term investments and described in the notes, not counted as current cash.