basic accounting equation to answer these questions. (a) The liabilities of Cummings Company are $90‚000 and the stockholders’ equity is $230‚000. What is the amount of Cummings Company’s total assets? (b) The total assets of Haldeman Company are $170‚000 and its stockholders’ equity is $90‚000. What is the amount of its total liabilities? (c) The total assets of Dain Co. are $800‚000 and its liabilities are equal to one-fourth of its total assets. What is the amount of Dain
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2. Qualitative 3. Objective 4. Qualitative 5. Objective SE2. 1. Full disclosure 2. Materiality 3. Cost benefit 4. Conservatism 5. Consistency SE3. 1. Property‚ plant and equipment 2. Current liability 3. Current liability 4. Not included 5. Owner’s Equity 6. Current Asset 7. Intangible Asset 8. Current Asset 9. Investment SE4. Balance Sheet May 31‚ 2011 Assets Current Assets Cash $200 Accounts Receivable $1100
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person owns. Including Liabilities Liabilities are debts or amounts of money that are owed to others by an individual or a business. Owner’s Equity or Net Worth A person’s or business’ assets‚ after all liabilities are deducted‚ is known as owner’s equity or net worth Balance Sheet Equations The balance sheet equation can be expressed in two ways: 1. To determine owner’s equity: Assets – Liabilities = Owner’s Equity 2. To determine total assets: Assets = Liabilities + Owner’s Equity Preparing
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assets 4. Long-term liabilities Solution 3-18 1. Acid-test ratio = Quick assets ÷ Current liabilities =1.20 Quick assets = Current assets - Inventories Quick assets = Current assets - $840‚000 Current assets ÷ Current liabilities =2.25 Current assets - $840‚000 ÷ Current liabilities =1.20 $840‚000 ÷ Current liabilities = 1.05 Current liabilities = $800‚000 Current assets ÷ $800‚000 = 2.25 Current assets = $1‚800‚000 2. Debt to equity ratio = Total liabilities ÷ Shareholders’ equity
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Ratio (unaudited) 2009 Ratio (unaudited) 2008 Ratio (audited) 2009 Ratio (audited) Current Ratio Current Ratio Current Ratio Current Ratio $130‚026 Assets $8‚380 Liabilities 15.52 to 1 $128‚867 Assets $23‚807 Liabilities 5.41 to 1 $130‚026 Assets $8‚380 Liabilities 15.52 to 1 $128‚867 Assets $ 23‚807 Liabilities 5.37 to 1 Quick Ratio Quick Ratio Quick Ratio Quick Ratio $41‚851 $37‚666 $79‚517 / $8‚380 9.49 to 1 $22‚995 $59‚787 $82‚782 / $23‚807 3.48
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1. Current Ratio = Current Assets / Current Liabilities Edison = 12‚800 / 3‚600 = 3.56 Stagg = 13‚800 / 3‚600 = 3.83 Thornton = 13‚800 / 3‚600 = 3.83 Quick Ratio = Quick Assets / Current Liabilities Edison = 11‚000 / 3‚600 = 3.05:1 Stagg = 10‚000 / 3‚600 = 2.78:1 Thornton
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Toyota Motor Financing Activities Debt to Equity (Total Liabilities / Total Equity) [pic] This ratio measures the financial leverage of a company by indicating what proportion of debt and equity a company is using to finance its assets. A lower number suggests there is both a lower risk involved for creditors and strong‚ long-term‚ financial security for a company. Based on the debt ratio of Toyota‚ as of 2009‚ the debt ratio is much higher than of other financial year. The year to year
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are the lack of previous financial years. The concluding remarks specify that the profitability ratios are profitable and Let it Snow has potential to be invested in. The liquidity ratios show that Let it snow is capable of meeting its short term liabilities with appropriate liquidity requirements and allows creditors to provide funding. The solvency ratios show that Let it Snow can repay its long term debt and is able to support itself financially. If you need further information do not hesitate
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------------------------------------------------- $10‚688 | ------------------------------------------------- $9‚870 | | | | Liabilities and Stockholders’ Equity | | | Current liabilities | $2‚584 | $2‚612 | Long-term liabilities | 1‚079 | 973 | Stockholders’ equity | ------------------------------------------------- 7‚025 | ------------------------------------------------- 6‚285 | Total liabilities and stockholders’ equity | ------------------------------------------------- $10‚688 | -------------------------------------------------
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ASSETS 2‚005‚482 100 1‚767‚168 100 1‚089‚473 100 EQUITY AND LIABILITIES CAPITAL AND RESERVES Share capital 61‚576 3.07 61‚576 3.48 61‚576 5.65 Reserves 534‚202 26.64 429‚959 24.33 342‚819 31.47 595‚778 29.7 491‚535 27.81 404‚395 37.12 LIABILITIES NON-CURRENT LIABILITIES Retirement benefits - obligation 3‚922 0.19 17‚519 0.99 8‚939 0.82
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