MGAB01H3 Chapter Notes - Chapter 2: Book Value, Retained Earnings, Cash Cash

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E2–4: Req. 1
Given Received
  
 


  
  

  


  
  
 ! "

  
#  $
  % %
&
  '
  
'
'()
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(
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 
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01(
E2–7
Even
t
Assets = Liabilities + Shareholders’
Equity
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(  2/).--
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E2–13 8
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E2–14
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8+<.<-- =+).<-- 29>6+/.---
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Document Summary

Cash (f) (g) (h) (i) (j) (k) (l) The land is (a) would be recorded as an asset at ,000. The truck in (g) would be recorded as an asset of ,000. The agreement in (k) occurs between the owner and others. There is no effect on the business because of the separate-entity assumption. E2 13 (amounts are in millions of euros) a. Cash ( a) b. c. d. e. f. g. This ratio indicates that, for every of current liabilities, massimo has . 55 in current assets. Massimo"s ratio is much higher than the industry average of 1. 50, indicating that massimo maintains a relatively high level of current assets than does the average firm in the industry. Although massimo"s current ratio is relatively high, and may be able to pay back short-term bank loans, one has to take into consideration its long-term note payable as well. Massimo"s liabilities are about twice the size of its equity.

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