Concept explainers
This is a financial statement that shows the available assets and claims to assets of a company at a particular point of time. Both the amount of assets and claims to assets remains always equal. Claims to assets are segregated into two categories, one is claims of creditors (liabilities) and the other is claims of stockholders (
This statement helps users to know about the creditworthiness of a company as to whether the company has enough assets to pay off its liabilities. The primary constituents of balance sheet are the assets, the liabilities and the stockholders’ equities, which are depicted below in the form of the mathematical equation.
Figure (1)
In balance sheet “total assets” and “total liabilities and stockholders’ equity” remains always in balance.
To Prepare: A balance sheet for Company K as at December 31, 2017.
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Financial Accounting: Tools for Business Decision Making, 8th Edition
- Ernst Companys balance sheet shows total liabilities of 32,500,000, total stockholders equity of 8,125,000, and total assets of 40,625,000. Required: Note: Round answers to two decimal places. 1. Calculate the debt ratio. 2. Calculate the debt-to-equity ratio.arrow_forwardConsider the following financial data for Terry Enterprises: Balance Sheet as of December 31, 2018 Cash $ 86,000 Accounts payable $ 15,500 Accts. receivable 91,500 Notes payable 93,500 Inventories 65,500 Accruals 19,500 Total current assets $ 243,000 Total current liabilities $ 128,500 Long-term debt 162,500 Net plant & equip. 419,500 Common equity 371,500 Total assets $ 662,500 Total liab. & equity $ 662,500 Statement of Earnings for 2018 Industry Average Ratios Net sales $ 642,500 Current ratio 2.2× Cost of goods sold 482,000 Quick ratio 1.7× Gross profit $ 160,500 Days sales outstanding 44 days Operating expenses 119,500 Inventory turnover 6.7× EBIT $ 41,000 Total asset turnover 0.6× Interest expense 14,500 Net profit margin 7.2% Pre-tax earnings $ 26,500…arrow_forwardUse the following selected financial information for Cascabel Corporation to answer questions Cascabel Corporation Balance Sheet December 31, 2015 Assets Liabilities and stockholders' equity Current assets Current liabilities Cash 2 Accounts payable 36 Short-term investments 10 Accrued liabilities 25 Accounts receivable 52 Total current liabilities 61 Inventory 57 Other current assets 8 Long-term debt 102 Total current assets 129 Total liabilities 163 Long-term assets Stockholders' equity Net Plant 195 Common stock (10) 110 Retained earnings 51 Total stockholders'…arrow_forward
- The balance sheet and income statement for J. P. RObard Manufatcuring Company are as follows: Item Cash J.P. Robard Manufacturing Company Balance Sheet as at 31 December 2021 ($ in thousands) 500 Account receivable Inventory Total current assets Net fixed assets Total assets Accounts payable Accrued expenses Short-term notes payable Total curernt liabilities Long-term debt Total common equity Total liabilities and equity 2,000 1,000 3,500 4,500 8,000 1,100 600 300 2,000 2,000 4.000 8,000arrow_forwardThe AHAI Company's balance sheet of December 31, 2018 is given below: Accounts payable Notes payable Accrued wages and taxes Long-term debt Common equity Total liabilities & equity Cash Accounts receivable Inventory Net fixed assets Total assets O a. $6 O b. $7 O c. $8 O d. $40 O e. $5 $10 25 40 95 $170 $20 25 15 30 80 $170 Sales during the past year were $1,000, and they are expected to increase to $2,000 during 2019. AHAI's fixed assets were used to 60% of capacity during 2018, but its current assets were at their proper levels. All assets except fixed assets increase at the same rate as sales, and fixed assets would also increase at the same rate if the current excess capacity did not exist. Assume that AHAI's profit margin will remain constant at 4.25 percent and that the company will continue to pay out 40 percent of its earnings as dividends. What amount of additional funds (AFN) will be needed during the next year assuming the company would use up the excess capacity before…arrow_forwardThe following balance sheet is for X Company: Balance Sheet January 1, 2021 Assets Equities Cash $96,928 Accounts Payable $205,898 Accounts Receivable 11,528 Wages Payable 1,138 Inventory 151,823 Notes Payable 33,991 Prepaid Rent 6,392 Paid-In Capital 313,317 Retained Earnings Total Equities Equipment 348,579 60,906 Total Assets $615,250 $615,250 The following summary transactions occurred during 2021: • borrowed $4,183 from the bank • purchased $268,201 of merchandise on account and $132,099 for cash • sold merchandise for $448,384 on account and $252,216 for cash; the merchandise cost $399,342 • paid $5,921 for land and equipment • received $8,583 in cash contributions from new owners Note: For the questions below, ignore adjusting entries on December 31, 2021. 6. What was the cash balance on December 31, 2021? O A: $73,440O B: $106,488 Oc: $154,407 OD: $223,890 OE: $324,640 F: $470,729 Submit Answer Tries 0/99 7. What was total owners' equity on December 31, 2021? O A: $386,717 O B:…arrow_forward
- Use the following data: Barry Computer Company Balance Sheet as of December 31, 2014 In thousands of $ Cash 85,775 Accounts payable 171,550 Receivables 669,045 Other current liabilities 257,325 Inventories 446,030 Notes payable 85,775 Total current assets 1,200,850 Total current liabilities 514,650 Net fixed assets 514,650 Long-term debbt 394,565 Common equity 806,285 Total assets 1,715,500 Total liabilities and equity 1,715,500 Barry Computer Company Income Statement For the year ended December 31, 2014 In thousands of $ Sales 2,350,000 COGS Materials 1,081,000 Labour 517,000 Heat, light and power 164,500 Indirect labour 188,000 Depreciation 94,000 Total COGS 2,044,500 Gross profit 305,500 Selling expenses 164,500 General and administrative expenses 47,000 EBIT 94,000 Interest expense 39,457 EBT 54,543 Federal and state income taxes (40%) 21,817 Net income 32,726 Calculate the following ratio for Barry Company. Round your answer to two decimal places. ROIC:arrow_forwardComplete the 20xx balance sheet for ABD Industries using the information that follows it. Balance Sheet Assets Cash 32,700 Marketable Securities 25,000 Accounts receivable a Inventories b Total current assets Net fixed assets e Total assets Liabilities and Stockholders' Equity Accounts payable 120,000 Notes payable Accruals 20,000 Total current liabilities Long-term debt i Total liabilities h Stockholders' equity 600,000 Total liabilities and stockholders' equity The following financial data are also available: а. Sales totaled PhP1,800,000 b. The gross profit margin was 25%. С. Inventory turnover was 6.0. d. There are 365 days in the year. е. The average collection period was 40 days. f. The current ratio was 1.60 g. The total asset turnover ratio was 1.20. h. The debt ratio was 60%arrow_forwardThe following balance sheet is for X Company: Balance Sheet January 1, 2021 Assets Equities Cash $94,017 Accounts Payable $220,885 Accounts Receivable 11,357 Wages Payable 1,125 Inventory 159,109 Notes Payable 34,625 Prepaid Rent 6,038 Paid-In Capital 274,069 Equipment 326,099 Retained Earnings 65,916 Total Assets $596,620 Total Equities $596,620 The following summary transactions occurred during 2021: paid $86,119 to suppliers for merchandise previously purchased on account paid $25,780 for advertising • sold merchandise for $437,100 on account and $267,900 for cash; the merchandise cost $366,600 • paid $5,191 for land and equipment • received $245,811 from customers for merchandise previously sold on account Note: For the questions below, ignore adjusting entries on December 31, 2021. 4. What were total assets on December 31, 2021? OA: $375,435 OB: $439,259 Oc: $513,933 OD: $601,301 OE: $703,522 OF: $823,121 Submit Answer Tries 0/99 5. What were total liabilities on December 31,…arrow_forward
- Just Dew It Corporation reports the following balance sheet information for 2017 and 2018. JUST DEW IT CORPORATION2017 and 2018 Balance SheetsAssetsLiabilities and Owners' Equity 20172018 20172018 Current assets Current liabilities Cash$ 10,400 $ 10,450 Accounts payable$ 72,250 $ 62,750 Accounts receivable28,000 27,200 Notes payable47,000 47,750 Inventory63,900 63,100 Total $ 119,250 $ 110,500 Total $ 102,300 $ 100,750 Long-term debt$ 63,000 $ 64,700 Owners' equity Common stock and paid-in surplus$ 83,000 $ 83,000 Fixed assets Retained earnings 157,050 190,550 Net plant and equipment$ 320,000 $ 348,000 Total$ 240,050 $ 273,550 Total assets $ 422,300 $ 448,750 Total liabilities and owners' equity $ 422,300 $ 448,750 Based on the balance sheets given for Just Dew It, calculate the following financial…arrow_forwardFollowing data reselected information on Marbel Company for the year 2019: Cash balance, January 1 130,000 Accounts receivable, January 1 190,000 Collections from customers 2,100,000 Stockholders’ equity, January 1 380,000 Total assets, January 1 750,000 Total assets, December 31 880,000 Cash balances, December 31 160,000 Accounts receivable, December 31 360,000 Total liabilities, December 31 390,000 The net income of Marbel for 2019 is: A. 490,000 B. 150,000 C. 110,000 D. 70,000arrow_forwardOn June 30, 2018, Streeter Company reported the following account balances: Receivables $ 51,700 Current liabilities $ (10,400 ) Inventory 87,000 Long-term liabilities (56,000 ) Buildings (net) 83,700 Common stock (90,000 ) Equipment (net) 34,000 Retained earnings (100,000 ) Total assets $ 256,400 Total liabilities and equities $ (256,400 ) On June 30, 2018, Princeton Company paid $309,500 cash for all assets and liabilities of Streeter, which will cease to exist as a separate entity. In connection with the acquisition, Princeton paid $17,300 in legal fees. Princeton also agreed to pay $61,100 to the former owners of Streeter contingent on meeting certain revenue goals during 2019. Princeton estimated the present value of its probability adjusted expected payment for the contingency at $20,300. In determining its offer, Princeton noted the following pertaining to Streeter: It holds a building with a fair value…arrow_forward
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning