Parkman Sporting Goods is preparing its annual report for its 2021 fiscal year. The company’s controller has asked for your help in determining how best to disclose information about the following items: Required: Indicate whether the above items should be disclosed (A) in the summary of significant accounting policies note, (B) in a separate disclosure note, or (C) on t

Entries disclosed in the summary of significant accounting policies note as the term implies, have to do with the accounting method a company uses to calculate certain metrics.

Entries that are not shown in the financial statements but are however important to know, will be put in a separate disclosure note.

1. A related-party transaction. B

Important but cannot be put into the financial statements so will go to a separate disclosure note.

2. Depreciation method. - A

Has to do with an accounting method used so will go to the significant accounting policies notes.

3. Allowance for uncollectible accounts. - C

Goes to balance sheet to reduce Accounts Receivables.  

4. Composition of investments. - B

Another important information that does not go into financial statement so will go to separate disclosure.  

5. Composition of long-term debt. - B

Important but not in financial statement. Separate disclosure.  

6. Inventory costing method. - A

Shows accounting method used so will go to significant policies notes.  

7. Number of shares of common stock authorized, issued, and outstanding. - C

Equity section of Balance sheet.  

8. Employee benefit plans. - B

Important but not in financial statement. Separate disclosure.