issue common stock for cash; acquire a building by mortgaging a portion of the purchase price‚ or issue common stock in exchange for convertible bonds. These investing and financing activities affect the amount and structure of a firm’s assets‚ liabilities‚ and shareholders’ equity. The total assets of a firm and the claims on assets also change every day because of operating activities. The firm engages in daily business operations to generate revenues and create assets‚ but to do so‚ the firm must
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1 for 2 reverse stock split All accounts are not affected. However‚ number of shares will decrease to 500‚000 while par value per share will increase to $20. A company whose stock stock is selling for $60 has the following balance sheet: Assets Liabilities Preferred stock Common stock ($12 par; 100‚000 shares outstanding) Paid-in capital Retained earnings Construct a new balance sheet showing the effects of 3 for 1 stock split‚ What is the new price of the stock? Assets 2. 30‚000‚000 14‚000
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Dubai Pet World -Grooming and Kennel Center Business Description Dubai Pet world Grooming and kennel centre was founded in 2007‚ is a profit making organization and intends to capture a big share of the growing pet market. After two years of operations the company went public. The company is only luxury services provider of boarding & grooming to the pets in Dubai. Although the product offered by the company are unique but the customer wanted all the pet facilities under one roof‚ which
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1) As you have learned in this week’s readings the Accounting Equation is Assets = Liabilities + Owners’ Equity. Is the accounting equation true in all instances? Provide sample transactions from your own experiences to demonstrate the validity of the Accounting Equation. 2) What does the term account mean? What are the different classifications of accounts? How do the rules for debits and credits impact accounts? Please provide an example of how debits and credits impact accounts.
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forms of business organization. Identify the users and uses of accounting information. Explain the three principal types of business activity. Describe the content and purpose of each of the financial statements. Explain the meaning of assets‚ liabilities‚ and stockholders’ equity‚ and state the basic accounting equation. Describe the components that supplement the financial statements in an annual report. Summary of Questions by Study Objectives and Bloom’s Taxonomy Item 1. 2. 3. 4. 5. 1. 2
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generating enough cash to pay its bills. 1. Current ratio: The aim of current ratio is to perform a company’s ability to meet its short term financial debts out of its current assets and is calculated as follows- current ratio=current assetscurrent liabilities Different type of business requires different current ratio. As an example-a manufacturing business required a high ratio because it has to hold inventories of finished goods‚ raw materials and work in progress and normally they sell goods on
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on its income statement” could be recorded (Berman et al.‚ 2013). Liabilities: Liabilities are “what a company owes to other entities” (Berman et al.‚ 2013). Liabilities can also describe how a company obtains its assets because they show up in different explanations on the balance sheet (Berman et al.‚ 2013). For example‚ long-term liabilities are “those that come due TASK TWO over a longer time frame” and short-term liabilities are due over a short time frame (Berman et al.‚ 2013). For
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Capital Structure Analysis Formula Debt-to-Equity Ratio = Total Liabilities / Equity. Formula Interest Coverage Ratio = Non-current Liabilities / Cash Flow from operations Formula Debt Coverage Ratio = Earnings Before Interest and Tax / Net Finance Expense Analysis The debt-to-equity ratios indicate how risky the firms are. It measures the extent that the assets of a firm are financed by its debts and equity. Lower values of debt-to-equity ratio are favorable indicating the firm
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as much stock and she may be overstaffed. Question 2 a) The purpose of a balance sheet is to show the financial position of a business; each accounting period has 2 balance sheets and 5 basic accounting elements these are- incomes‚ expenses‚ liabilities‚ assets and
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1. Introduction CLC is a fast growing business with small number of employees‚ providing plywood moldings‚ sash and door products. It built on its sales volume largely on the basis of successful price competition‚ careful control of operating expenses and batch purchasing of materials at substantial discounts during past years. The sound market condition and operation contributes to CLC’s growing trend in a foreseeable future. Besides‚ in case of an economic downturn‚ the business is protected to
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