1. a) b) c) d) A firm has the following items on its balance sheet: Cash $20‚000‚000 inventory 134‚000‚000 Notes Payable to bank 31‚500‚000 common stock ($10 par; 1‚000‚000) 10‚000‚000 Retained earnings 98‚500‚000 Describe how each of these account would appear after: A cash dividend of $1 per share Cash will decrease by $1‚000‚000. Retained earnings will decrease by $1‚000‚000. All other accounts are not affected. A 10 percent stock dividend (fair market value of stock is $13 per
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positive net income for the three years prior to year 14‚ the cash that the company had on the balance sheet was much lower than the net income. In year 14 the company showed cash on the balance sheet of $159‚000 but net income was negative $3.83 million. Companies have a way of manipulating net income but it is much harder to manipulate cash on the balance sheet. Looking at a company’s cash on a balance sheet is a greater indicator of financial health over net income. The company‚ in order to avoid
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value and confirmatory value b. Comparability‚ consistency‚ and confirmatory value c. Understandability‚ predictive value‚ and reliability d. Completeness‚ neutrality‚ and freedom from error 2. The amount reported as “Cash” on a company’s balance sheet normally should exclude a. Postdated checks that are payable to the company b. Cash in a payroll account c. Undelivered checks written and signed by the company d. Petty cash 3. Which of the following reconciling items would require an adjusting
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regulates the financial transactions of the company. The finance function provides authorization and control to all the subsystems to utilize the money more efficiently through a well-designed mechanism. The dept prepares profit and loss accounts‚ balances‚ budgets‚ financial performance statements and employee cost analysis etc.‚ for the purpose of finding the operating result‚ financial position‚ future prospects and many other objectives. This reveals the profitability and hence the performance
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ensure that they are internally consistent. It also assists the firm in identifying the asset requirements and needs for external financing. For example‚ the principal driver of the forecasting process is generally the sales forecast. Since most Balance Sheet and Income Statement accounts are related to sales‚ the forecasting process can help the firm assess the increase in Current and Fixed Assets which will be needed to support the forecasted sales level. Similarly‚ the external financing which will
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includes common stock and retained earnings. The accounting balance sheet is one of the biggest financial statements used by accountants and business owners‚ these are income statements‚ cash flow statements‚ and stockholders equity statements. Balance sheet allows the creditor to see what a company owns as well as what he owes. These are very important things for someone to know for potential investors and others. So as we know‚ the balance sheet reflects the accounting equation‚ it shows the reports
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Balsara Hygiene Products Limited Audited Balance Sheet and Profit & Loss Accounts for the year ended 31st March‚ 2006 BALSARA HYGIENE PRODUCTS LIMITED 17 ANNUAL REPORT 2005-06 Contents Page Director’s Report Auditor’s Report Balance Sheet Profit & Loss Account Schedules Accounting Policies & Notes to Accounts Statement of Cash Flow 1 4 7 8 9 12 15 BALSARA HYGIENE PRODUCTS LIMITED 18 ANNUAL REPORT 2005-06 DIRECTORS’ REPORT The Directors’ have pleasure in presenting the
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financial statements and how these three important financial statements has made analyst life simpler by ensuring consistency in reporting. Balance sheet‚ income statement and cash flow statement are the three important financial statements. Balance sheet: A Balance Sheet is a financial statement that shows the financial position at a given date. Balance sheet includes a company’s assets and liabilities. Assets are what we own and these are of two types; fixed asset and currents assets. Current assets
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19‚ 2012 Instructor: Carl Schulz Abstract The purpose of this paper is to discuss current and noncurrent assets‚ define the differences and similarities between the two‚ and address what the order of liquidity is and how it applies to the balance sheet. In business an asset is defined as a property or equipment owned by a company that has a positive economic value. There are two main types of assets: current assets and non-current assets. Current Asset Current assets are assets that
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accounting system creates financial accounting reports which are provided to external decision makers. True False 2. Business managers utilize managerial accounting reports to plan and manage the daily operations. True False 3. The balance sheet includes assets‚ liabilities and stockholders’ equity as of a point in time. True False 4. Revenue is recognized within the income statement during the period in which cash is collected. True False 5. Total assets are $37‚500‚ total
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