Pages -99, 101-102 -216, 220-225

9 important questions on Pages -99, 101-102 -216, 220-225

Statement of owner's Equity

Prepared for a proprietorship form of business organization

Difference Balance Sheet & Income Statement?

An Income statement is for a stated period of time and a balance sheet is a given date, on a particular date.

Formule Net asset value/ book value

Cost of assets - accumulated depreciation
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Current Portion of Long term debt

Includes the principal portion of long-term debt that is due within one year of the balance sheet date.

Long- term liabilities/ long- term debt

Any debt is not due within 12 months of the balance sheet date.

Formula Long-term Liabilities/ Long-term debt

Any portion which is due within 12 months is subtracted from the total and shown in current liabilities.

Equity section of a corporate balance sheet is called:

Stockholders' equity

On the balance sheet Stockholders' equity entail (in order):

  1. Paid- In Capital
    1. Preferred Stock
    2. Common Stock
    3. Additional Paid-In Capital
    4. total Paid-In Capital
  2. Donated capital
  3. Retained Earnings
  4. Total
  5. Deduct: Common Treasury stock at cost
  6. Total Stockholders' Equity

Statement of Retained Earnings

  • Prepared to show the changes to retained earnings during the year.
  • Net Income from Income Statement in added to start value of Retained earnings
  • Any dividends declared are deducted (-taken off)
  • End Value of Retained Earnings visible in Balance Sheet at the end of year

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