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Essay Available:
Pages:
3 pages/≈825 words
Sources:
3 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Coursework
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 16.85
Topic:

Balance Sheet for ABC Company

Coursework Instructions:

Module 2 - Case
THE BALANCE SHEET
Assignment Overview
The background material for this module explains and shows examples of balance sheets. Pay attention to the layout and definitions before reviewing the balance sheet the for ABC Company shown below.
This assignment has two parts.
An essay
Answer 10 questions relating to ABC’s balance sheet.
Case Assignment
Part 1
Write a minimum of 300 words about the role of the balance sheet as one of the four required financial statements.
- Comment on some significant characteristics of the balance sheet.
- Who is interested in the information?
- What kind of information does the balance sheet convey to users?
Part 2
Review the background material for the second module before attempting the case below in order to answer a series of questions about the balance sheet for ABC Company shown below. Start with the accounting equation and pay attention to definitions of assets, liabilities, and equity.
The background information for the module includes the basic concepts, but for more ideas, go to the optional background source principlesofaccounting.com.
https://www(dot)principlesofaccounting(dot)com/chapter-1/financial-statements/
The site also offers multiple videos that you may find relevant. You may also use other sites for ideas to complete the table. Do not forget to reference the sources used.
Find the balance sheet for ABC Company below. The data is to be used for part 2 of the current case assignment and the SLP for this module.
*Balance Sheet is attached.
Answer each question below and explain your answer with numbers, computations, and 3 to 5 sentences.
1) Determine total assets and total liabilities for ABC Company. Add some thoughts about the significance of the classifications.
2) Complete the accounting equation below using numbers from ABC’s balance sheet instead of words. In addition, explain how this equation is significant for the creation and understanding of the financial statements.
Assets = Liabilities + Equity
3) Are short-term payables or receivables larger? Show the computation. Explain the significance of the difference.
4) Is the order in which assets and liabilities are listed on the balance sheet significant? Explain.
5) Determine the total amount owed by ABC at the end of the year. How could this information be useful to a reader of the balance sheet?
6) Does the company have more assets or liabilities? What is the significance of determining the difference between net assets and net liabilities? What happens to a company if the total liabilities exceed the total assets?
7) If the company borrows an additional $15,000, which two balance sheet accounts will be affected? The new totals for total assets and total liabilities are …..?
8) Explain retained earnings. How is this accounting computed? Is retained earnings an asset, a liability, or an equity account?
9) What is the “total wealth” of the company according to the balance sheet? What are some other accounting terms for “wealth” in connection with corporate entities? For example, retained earnings account fits this category, but it is not the only account.
10) Assume that the company paid $20,000 in dividends to the shareholders. Which balance sheet accounts (items) would have been affected by the payment? Use numbers and be specific.
Assignment Expectations
Follow the instructions carefully. Do not copy and paste definitions.
Complete Part 1 using an essay format.
Do not use an essay format for part 2; instead, answer each question separately and in order.
Show sources when appropriate. APA format is suggested but not required.

Coursework Sample Content Preview:

Module 2: Case the Balance Sheet
Student Full Name
Institutional Affiliation
Course Full Title
Instructor Full Name
Due Date
Module 2: Case the Balance Sheet
Part 1
One of the significant characteristics of the balance sheet is that it is a position statement that reports a company’s assets, liabilities, and proprietors’ equity. Another significant characteristic is that it is a periodical statement since it shows a company’s financial position at a particular point in time, usually at the end of a financial year. The third characteristic of balance sheets is that they are unallocated cost statements. All assets reported in the balance sheet are unallocated resources and will be discounted in the future. The fourth significant characteristic of balance sheets is that they are complementary statements. Balance sheets do not give a complete picture of a company’s financial health; other financial statements, like the income statement, are necessary to determine a firm’s financial position. The people interested in the information contained in a balance sheet are business owners, investors, and banks. A business owner will be interested in maintaining a balance sheet to determine the company’s ability to meet its short-term obligations and avoid bankruptcy. Investors also require a balance sheet to evaluate a company’s financial position and future growth potential for investment. Moreover, banks are also interested in evaluating a company’s balance sheet before issuing any loans to determine if it can repay the money. The kind of information conveyed by the balance sheet to users includes the debit and credit balances of an organization’s real and personal accounts at a particular point in time. The balance sheet also shows shareholder equity, or the money invested by the business owner and its shareholders. Overall, the balance sheet conveys a company's financial position as an interim report.
Part 2
Q1.
The total assets for ABC Company are $128,000, while the total liabilities are $80,000. Total assets are listed on the left side of the balance sheet in order of their liquidity, while liabilities are listed on the right side of the balance sheet in order of their due date. Total assets include current assets (assets that can be liquidated in one year or less) and long-term assets (assets that need more than one year to be converted to cash). Total liabilities include current liabilities (debts that are due in one year or less) and long-term liabilities (debts that are due in more than one year) (Brex Inc., 2023).
Q2.
$292,000 = $136,000 + $156,000
This equation is significant for the creation and understanding of the financial statements because it is intuitive of how companies operate: companies have to pay for all resources it owns (assets) by either taking loans (liabilities) or borrowing from investors (shareholder equity). A company’s assets must...
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