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Must always balance economic resources sources of

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Unformatted text preview: Economic resources = Sources of financing What you have = Where it came from A – L = SE Net assets = Owners’ equity or residual equity Chapter One Assets are economic resources owned by the th business as a result of past transactions. Slide 13 MAXIDRIVE CORP. Balance Sheet At December 31, 2009 (in thousands of dollars) Assets Cash $ 4,895 Accounts receivable 5,714 Inventories Inventories 8,517 Plant and equipment 7,154 Land 981 Total assets $ 27,261 Liabilities and Stockholders' Equity Amount Liabilities of cash in the company’s bank Cash accounts. Accounts payable $ 7,156 Accounts Notes payable Assets are listed by their ease of conversion into cash. Chapter One Amounts owed by customers from prior 9,000 receivable sales. Total liabilities $ 16,156 Parts and completed but unsold Stockholders' Equity Inventories Contributed capital $ 2,000 products. Retained earnings 9,105 Plant and Factories and production machinery. Total stockholders' equity 11,105 equipment Total liabilities and stockholders' equity $ 27,261 Land Land on which factories are built. Slide 14 MAXIDRIVE CORP. Balance Sheet At December 31, 2009 (in thousands of dollars) Assets Cash Accounts receivable Inventories Plant and equipment Land Total assets Liabilities and Stockholders' Equity Liabilities $ Accounts payable Liabilities are debts or obligations of the business that result from past transactions. 4,895 5,714 8,517 7,154 981 $ 27,261 $ Notes payable 7,156 9,000 Total liabilities $ 16,156 Stockholders' Equity Accounts Amounts owed to suppliers for prior Contributed capital payable purchases. Retained earnings Notes Amounts owed on written debt Total stockholders' equity payable contracts. Total liabilities and stockholders' equity $ 9,105 11,105 $ 27,261 Chapter One Slide 15 Equity is the amount of financing provided by owners of the business and earnings. MAXIDRIVE CORP. Balance Sheet At December 31, 2009 (in thousands of dollars) Assets Cash Accounts receivable Inventories Plant and equipment Land Total assets Liabilities and Stockholders' Equity Liabilities Contributed Amounts invested in the business by Accounts payable capital stockholders. Retained earnings 2,000 Notes payable Past...
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