Various Liabilities) How would each of the following items be reported on the balance sheet? a) Current Liability b) Current Liability c) Current or long-term liability (dependent on term of warranty) d) Current liability e) Current liability f) Current liability g) Current or noncurrent (dependent on time involved) h) Current liability i) Current liability j) Current liability k) Deduction from face value of note l) Disclose in footnote m) Current liabilities n) Current liability o)
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accounting equation is an equation that includes the Assets‚ Liabilities‚ and Stock of a company. These three attributes determine the value of a company. This value is used to file the company’s taxes. When the value is figured by the accounting equation‚ investors can determine a possible return on their investments. Assets are resources owned by a business. Liabilities are the debts and obligations of the business. Liabilities represent claims of creditors on the assets of the business
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(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 Co.’s stockholders’ equity? Assets = Liabilities + Stockholders’
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Exercise 2.1 Assets‚ liabilities and owner’s equity Item | Classification | a Stock of supplies | | b Mortgage | | c Cash at bank | | d Debtors Control | | e Loan | | f Creditors Control | | g Equipment | | h Bank (overdraft) | | i Vehicle | | j Capital | | Exercise 2.2 Accounting equation a Calculation | | Owner’s Equity | $ | b Calculation | | Owner’s Equity | $ | c Calculation |
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Chapter 1 Accounting and the Business Environment Short Exercises (5 min.) S 1-1 Revenues increase owner’s equity by delivering goods or services to customers. Expenses decrease owner’s equity by using up assets or increasing liabilities in order to deliver goods or services to customers. (5 min.) S 1-2 1. The banker is an external user of financial information. 2. The financial statement that would provide the best information to answer the banker’s questions is the
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Calculations- Liabilities and Assets for PepsiCo Inc. based on their consolidated Balance Sheet Current Ratio= 10‚454 (Current Assets) | = 1.11% | 9‚406 (Current Liabilities) | | 2005 2004 Current Ratio= 8‚639 (Current Assets) | = 1.28% | 6‚752 (Current Liabilities) | |
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CHAPTER 1 COVERAGE OF LEARNING OBJECTIVES LEARNING OBJECTIVES QUESTIONS EXERCISES PROBLEMS OTHER LO1: Explain how accounting information assists in making decisions. 1‚2‚3‚4‚5‚23 49‚51 LO2: Describe the components of the balance sheet. 6‚7‚22 26 49‚50‚51 LO3: Analyze business transactions and relate them to changes in the balance sheet. 8‚9 27‚28 32‚33‚34‚35‚ 36‚37 48‚51 LO4: Prepare a balance sheet from transactions data. 29‚30‚31 38‚39‚40‚ 41‚42 LO5: Compare
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financially sound by a comparison of the amount of finance raised by debt with the amount raised from owners. The higher the proportion raised by the debt‚ the higher the risk to the creditors. The working capital‚ i.e. current assets less current liabilities indicates a company’s ability to pay its bills on time. This assumes that the current assets can be readily turned into cash. To declare a dividend a company must have adequate cash (or overdraft facilities) and adequate retained profits. The decision
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and losses and revenue earned during that period. Balance Sheet gives a summary of assets and liabilities as on a particular date and shows the financial position of the business. The liabilities side of a balance sheet shows the sources from where funds are raised and the assets side shows how the funds raised are utilized. But it does not show the causes or reasons for changes in assets and liabilities‚ flow of funds‚ between two balance sheet dates. Therefore‚ a statement is prepared in addition
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Profit and loss accounts‚ balance sheets Profit and loss accounts‚ balance sheets Two of the most important financial statements for a business are the Profit and Loss Account‚ and the Balance Sheet. The Profit and Loss Account shows the profit or loss of a business over a given period of time e.g. 3 months‚ 1 year‚ etc. In contrast‚ the Balance Sheet is like a photograph taken at an instant in time giving a picture of what the business owns and what the business owes at that moment in time
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