The net income by 80000 changing the property tax

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the net income by $80,000, changing the property tax updated amount from $87,000 to only a $7,000 amount for net income. 7. Does the company own any equipment? Is it informative to also check the balance sheet to answer this question? Explain. The ABC company lists $20,000 under operating expenses for depreciation. This is depreciation against equipment. The balance sheet should provide a bit more detailed information about how much equipment is listed as assets. 8. Does the company have debt? How much debt? Explain how the income statement and balance sheet provide answers to the questions? To evaluate the company’s debt, we need to look at the liabilities listed on the balance sheet. The total current liabilities are $26,000 the total long-term liabilities from the balance sheet are $90,000. Liabilities are also known as debts that owed by the company. 9. How do we know that ABC Company is using the accrual basis of accounting? Hint: Do not forget to look at the balance sheet from the prior module. This question seems a bit tricky to me, the date listed leads me to believe this statement is recording activity for a fiscal year. However, accrual basis accounting is stated to record the effects of each transaction as it occurs, revenues are recorded when earned, and expenses are recorded when incurred. The information in the income statement does not seem to show monthly transactions for this financial period. I could be wrong, but this seems to look more like the cash basis of accounting.
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10. What happens to income statement at the end of the period? Is it continuous or does it close (terminate)? Financial statements record information into segments, or time periods. Recording information in time periods gives us a time line that will help tell the story about the business’s activity. Once the period ends, the financial statements close and another one is opened to record each time period separately.
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