Solutions to Questions and Problems NOTE: All end of chapter problems were solved using a spreadsheet. Many problems require multiple steps. Due to space and readability constraints, when these intermediate steps are included in this solutions manual, rounding may appear to have occurred. However, the final answer for each problem is found without rounding during any step in the problem. Basic1.To find owner’s equity, we must construct a balance sheet as follows: Balance SheetCA $5,100 CL $4,300 NFA 23,800LTD 7,400 OE ??TA $28,900TL & OE $28,900We know that total liabilities and owner’s equity (TL & OE) must equal total assets of $28,900. We also know that TL & OE is equal to current liabilities plus long-term debt plus owner’s equity, so owner’s equity is: OE = $28,900 – 7,400 – 4,300 = $17,200 NWC = CA – CL = $5,100 – 4,300 = $800 CHAPTER 2 FINANCIAL STATEMENTS, TAXES AND CASH FLOW
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