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The balance sheet is set up to reflect the Fundamental Accounting Equation. This equation shows:
 
A.Assets = Liabilities + Owners' equity.
B. Revenues - Expenses = Gross profit.
C. Cash inflows = Cash outflows.
D. Current assets + Current liabilities = Owners'equity.

 

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Beverley Smith
Beverley SmithLv2
26 Mar 2020

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Related questions

Find the following ratios with the information provided by the balance sheet.

a.??Current ratio

b.??Operating return on assets

c.??Times interest earned

d.??Debt ratio

e.??Inventory turnover

f.??Average collection period

g.??Total asset turnover

h.??Fixed asset turnover

i.??Operating profit marginj

j.??Return on equity

Cash $ 506

Accounts receivable 2,002

Inventories 1,003

Current assets $ 3,511

Net fixed assets 4,521

Total assets $ 8,032

Accounts payable $ 1,101

Accrued expenses 619

Short-term notes payable 284

Current liabilities $ 2,004

Long-term debt 1,981

Owners' equity 4,047

Total liabilities and owners' equity 8,032

Net sales (all credit) $ 7,976

Cost of goods sold -3,284

Gross profit $ 4,692

Operating expenses (includes $509 depreciation) -3,000

Operating income $ 1,692

Interest expense -344

Earnings before taxes $ 1,348

Income taxes (40%) -539

Net income 809

Balance Sheet

ASSETS:

Cash and Marketable Securities: $75.00

Accounts Receivable: $100.00

Inventories: $200.00

TOTAL CURRENT ASSETS: $375.00

Gross Property, Plant and Equipment: (blank)

less Accumulated Depreciation: $50.00

NET FIXED ASSETS: (blank)

TOTAL ASSETS: (blank)

LIABILITIES AND EQUITY:

Accounts Payable: $75.00

Notes Payable: (blank)

Accruals: $75.00

TOTAL CURRENT LIABILITIES: $300.00

Long Term Debt: $350.00

TOTAL LIABILITIES: $650.00

PREFERRED STOCK: (blank)

Common Stock: $50.00

Accumulated Retained Earnings: $125.00

COMMON EQUITY: $175.00

TOTAL LIABILITIES AND EQUITY: $875.00

1. Consider the balance sheet above:

A. What is the value for total assets?

B. What is the value for net fixed assets?

C. What is the value for gross, property, plant andequipment?

D. What is the value for notes payable?

E. What is the value for preferred stock?

Thank you in advance!!

Analysis of a company's financial statements: Below are simplified versions of the balance sheet and income statement for Toys by Tom, Inc. What is Toys by Tom, Inc. return on assets (ROA)?
6.9%
0.86
18%
1.2


Income Statement – Year ending Dec 31 2006
Sales $12.00
Less Cogs 8.40
Less Depreciation 0.80
Gross Profit 2.80
Less – SG & A 1.20
Operating Profit 1.60
Less – Interest Expense 0.25
Profit before tax 1.35
Less – Income Tax 0.54
Net Income 0.81
Items in $1000

Balance Sheet
Assets Liablities and owners equity
Current assets Current Liabilities
Cash $0.50 Current Portion, LTD 0.75
Accts receivables 1.00 Accts Payables 2.50
Inventories 2.50 Other Acrued expenses 1.75
Total Current assets 4.00 Revolving credit,bank 2.00
Next fixed assets 10.00 Total Current Liablities 7.00
Total assets 14.00 Long term mortgage debt 2.50
Net worth 4.50
Total Liab and net worth 14.00

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