Ch002 - Chapter 2: Accounting Statements and Cash Flow 2.1...

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Chapter 2: Accounting Statements and Cash Flow 2.1 Following the example in Table 2.1: Assets Current assets Cash $4,000 Accounts receivable 8,000 Total current assets $12,000 Fixed assets Machinery $34,000 Patents 82,000 Total fixed assets $116,000 Total assets $128,000 Liabilities and equity Current liabilities Accounts payable $6,000 Taxes payable 2,000 Total current liabilities $8,000 Long-term liabilities Bonds payable $7,000 Stockholders equity Common stock* $88,000 Capital surplus 19,000 Retained earnings 6,000 Total stockholders equity $113,000 Total liabilities and equity $128,000 * You can back this out knowing that Total Assets = Total Liabilities + Equity 2.2 One year ago Changes Today Long-term debt $50,000,000 none $50,000,000 Preferred stock 30,000,000 none 30,000,000 Common stock 100,000,000 10 million new issue 110,000,000 Retained earnings 20,000,000 5 million net income less 3 million paid out dvds 22,000,000 Total $200,000,000 $212,000,000 B-41
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2.3 Following the example in Table 2.2: Income Statement Total operating revenues 500000 Cost of goods sold (200000) Administrative expenses (100000) (300000) Earnings before interest and taxes (EBIT)
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Ch002 - Chapter 2: Accounting Statements and Cash Flow 2.1...

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