15BP Arrange the following items in p... [FREE SOLUTION]

91影视

Foundations Of Financial Management

Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen

Business Studies

16th Edition 路 768 pages

ISBN: 9781259277160

Chapter 2: 15BP (page 51)

Arrange the following items in proper balance sheet presentation:
Accumulated depreciation
$309,000
Retained earnings
187,000
Cash
14,000
Bonds payable
136,000
Accounts receivable
54,000
Plant and equipment 鈥� original cost
775,000
Accounts payable
35,000
Allowance for bad debts
9,000
Common stock, $1 par, 100,000 share outstanding
100,000
Inventory
70,000
Preferred stock, $59 par, 1,000 share outstanding
59,000
Marketable securities
24,000
Investments
20,000
Notes payable
34,000
Capital paid in excess of par (common stock)
88,000

Short Answer

Expert verified

Common stock, preferred, capital paid in excess of par, and retained earnings are considered the equity and shown as the shareholder funds. The accounts payable, bonds payable, and notes payable are treated as liability and classified as a current liability. The cash, account receivable, inventory, and marketable securities are treated as the current assets, and the plant and machinery are considered the fixed asset of the company.

Step by step solution

Retained earnings

Retained earnings refer to the portion of the net income of a company that is held and saved by an organization for future investment and further growth opportunities.

Presentation of the balance sheet

Particulars	Amount ($)
Equity and liabilities
Shareholder鈥檚 funds:
Share capital Common stock ($100,000+$88,000) Preferred stock	188,000 59,000
Reserve and surplus (retained earnings)	187,000

Non-current liabilities
Bonds payable	136,000

Current liabilities
Accounts payable	35,000
Notes payable	34,000
Total	639,000

Assets:
Non-current assets:
Fixed assets $775,000 Less: Depreciation $309,000	466,000
Investments	20,000

Current assets:
Current investment (marketable securities)	24,000
Inventories	70,000
Accounts receivable $54,000 Less: allowance for bad debts $9,000	45,000
Cash and cash equivalent	14,000

Total	639,000

Unlock Step-by-Step Solutions & Ace Your Exams!

Full Textbook Solutions
Get detailed explanations and key concepts
Unlimited Al creation
Al flashcards, explanations, exams and more...
Ads-free access
To over 500 millions flashcards
Money-back guarantee
We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Recommended explanations on Business Studies Textbooks

View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

BALANCE SHEET End of year (in \) million)
Assets		Liabilities and Stockholder鈥檚 equity
Cash	\(25	Accounts payable	\)64
Accounts receivable	40	Accrued expenses	31
Inventory	82	Other payables	45
Plant and equipment	133	Common stock	50
		Retained earnings	90
Total assets	\(280	Total liabilities and stockholder鈥檚 equity	\)280

STERLINE TIRE COMPANY Income Statement For the year ended December 31, 20X1
Sales (20,000 tires at \(60 each)	\)1,200,000
Less: variable costs (20,000 tires at \(30)	600,000
Less: fixed cost	400,000
Earnings before interest and taxes (EBIT)	\)200,000
Interest expenses	50,000
Earning before taxes (EBT)	\(150,000
Income tax expenses (30%)	45,000
Earning after taxe (EAT)	\)105,000

SNIDER CORPORATION
Balance sheet
December 31, 20X1
Assets
Current assets:
Cash	\(52,200
Marketable securities	24,400
Accounts receivable (net)	222,000
Inventory	238,000
Total current assets	\)536,600
Investments	65,900
Plant and equipment	\(615,000
Less: accumulated depreciation	(271,000)
Net plant and equipment	\)344,000
Total assets	\(946,500
Liabilities and stockholder鈥檚 equity
Current liabilities:
Account payables	\)93,400
Notes payable	70,600
Accrued taxes	17,000
Total current liabilities	\(181,000
Long term liabilities:
Bonds payable	\)153,200
Total liabilities	\(334,200
Stockholder鈥檚 equity
Preferred stock, \)50 per value	\(100,000
Common stock, \)1 par value	80,000
Capital paid in excess of par	190,000
Retained earnings	242,300
Total stockholder鈥檚 equity	\(612,300
Total liabilities and stockholder鈥檚 equity	\)946,500

SNIDER CORPORATION
Income statement
For the year ending December 31, 20X1
Sales (on credit)	\(2,064,000
Less: cost of goods sold	1,313,000
Gross profit	\)751,000
Less: selling and administrative expenses	496,000*
Operating profit (EBIT)	\(255,000
Less: interest expenses	26,900
Earning before tax (EBT)	\)228,100
Less: taxes	83,300
Earning after taxes (EAT)	\(144,800

91影视

Short Answer

Step by step solution

Retained earnings

Presentation of the balance sheet

One App. One Place for Learning.

Most popular questions from this chapter

Recommended explanations on Business Studies Textbooks

Organizational Behavior

Influences On Business

Actuarial Science in Business

Family Business

Project Planning & Management

Managers

Study anywhere. Anytime. Across all devices.

Accumulated depreciation	\(309,000
Retained earnings	187,000
Cash	14,000
Bonds payable	136,000
Accounts receivable	54,000
Plant and equipment 鈥� original cost	775,000
Accounts payable	35,000
Allowance for bad debts	9,000
Common stock, \)1 par, 100,000 share outstanding	100,000
Inventory	70,000
Preferred stock, $59 par, 1,000 share outstanding	59,000
Marketable securities	24,000
Investments	20,000
Notes payable	34,000
Capital paid in excess of par (common stock)	88,000

Retained earning	Bond payable
Accounts payable	Accrued wages payable
Prepaid expenses	Accounts receivable
Plant and equipment	Capital in excess of par
Inventory	Preferred stock
Common stock	Marketable security