ACCT-3110 Lecture Notes - Lecture 5: Debt Service Coverage Ratio, Financial Statement, Current Asset

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Information about assets, liabilities and equity as of a specific date. Classification of a et /liabilitie in a (cid:862)cla ified balance sheet(cid:863) Cash or other assets that a company expects to convert into cash, sell or consume in 1 year or the operating cycle, whichever is longer. Obligations which a company expects to pay within the next year or the operating cycle, whichever is longer. Current asset classification: presented in order of liquidity, cash, short-term investments, accounts receivable. Long-lived assets which have future value or benefit to a company beyond the next year or operating cycle. Obligations that a company does not expect to liquidate in the next year or operating cycle. The nature of any cash restriction must be disclosed in the footnotes. Debt securities that a company has (cid:271)oth the positi(cid:448)e (cid:862)i(cid:374)te(cid:374)t(cid:863) a(cid:374)d (cid:862)a(cid:271)ility(cid:863) to hold to maturity.

Related Questions

ch of the following would NOT be considered an inventoriable productcost in an automated manufacturing environment?

rent paid on the production facilities

wages paid to the factory machine operators

depreciation on the equipment in the factory

delivery charges paid for finished goods shipped to customers

2)An inflow of cash from an investing activity would be ________.

assuming a long term debt

selling a piece of equipment

issuing common stock

receiving cash for sales to customers on account

3)Which of the following statements does NOT accurately describe the information provided by the statement of cash flows?

provide managers with a tool to assess if cash flows are sufficient to meet operational demands

provide information relevant to the decision to make cash distributions to owners of the company

provide a format for calculating net income on the accrual basis of accounting

4)What is the current ratio for Company A calculated using the following Balance Sheet?

Company A

Balance Sheet

December 31, 2010


Assets
Cash	$29,000
Accounts receivable (net)	114,000
Inventory	113,000
Prepaid expenses	6,000

Long-term investments

18,000

Net property, plant, and equipment

507,000

Total assets

$787,000

Liabilities and equity

Accounts payable

$73,000

Note payable

358,000

Common stock

186,000

Retained earnings

170,000

Total liabilities and equity $787,000

3.59

7. An appropriation of retained earnings by the board ofdirectors of a corporation for future plant expansion will resultin. Please explain

A.	A decrease in the total retained earnings presented on thebalance sheet.
B.	A decrease in cash on the balance sheet with an equal increasein the investments and funds section of the balance sheet.
C.	The establishment of a fund to help finance future plantexpansion.
D.	The disclosure that management does not intend to distribute, inthe form of dividends, assets equal to the amount of theappropriation.

8. The primary purpose of a statement of cash flows is toprovide relevant information about. Please explain

A.	Differences between net income and associated cash receipts anddisbursements.
B.	An entityâs ability to meet cash operating needs.
C.	An entityâs ability to generate future positive net cashflows.
D.	The cash receipts and cash disbursements of an entity during aperiod.

orangedolphin170

1. Produce a balance sheet for a company that distinguishesbetween current and non-current assets and liabilities.
2. Create a balance sheet from a trial balance.
3. Create a comparison of net income based on different methods ofinventory accounting.
4. Analyze a statement of cash flows and show where each line itemcan be found or calculated from the other financialstatements.
5. Prepare a full analysis of key financial ratios for a companyand state conclusions about the financial strength of the companycompared to industry ratios.

Create a BalanceSheet from the trial balance:
		Debits	Credits	Classification

	Cash	300,000.00		Current asset

	Sales		(10,000,000.00)	Income statement

	Cost of Goods Sold	7,000,000.00		Income statement

	Selling Expenses	500,000.00		Income statement

	Other income		(50,000.00)	Income statement

	Administrative expenses	350,000.00		Income statement

	Interest Expenses	12,500.00		Income statement

	Land	300,000.00		non-current asset

	Building	2,000,000.00		non-current asset

	Long Term bond payable		(550,000.00)	non-current liability

	Accrued Liabilities		(50,000.00)	current- liability

	Accumulated Depreciation Buildings		(250,000.00)	non-current asset

	Equipment	750,000.00		non-current asset

	Receivables	100,000.00		current asset

	Allowance for doubtful accounts		(7,500.00)	current asset

	Accumulated depreciation equipment		(125,000.00)	non-current asset

	Common Stock		(200,000.00)	equity

	Payables		(115,000.00)	current Liability

	Inventories	200,000.00		current asset

	Prepaid Expenses	50,000.00		current asset

	Retained Earnings		(215,000.00)	equity



		11,562,500.00	(11,562,500.00)



Assets		Equity and Liabilities

Current Assets		Current Liabilities





Total Current Assets	-	Total Current Liabilities	-




		Total long term Liabilities	-

Total property plant and equipment	-






		Total Equity	-


Total Assets	-	Total Equity and liabilities	-

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ACCT-3110 Lecture Notes - Lecture 5: Debt Service Coverage Ratio, Financial Statement, Current Asset

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