Answer & Explanation:
Most balance sheets are arranged according to this equation:
Assets = Liabilities + Shareholders’ Equity
The equation above includes three broad buckets, or categories, of value which must be accounted for:
1. Assets
An asset is anything a company owns which holds some amount of quantifiable value, meaning that it could be liquidated and turned to cash. They are the goods and resources owned by the company.
Assets can be further broken down into current assets and noncurrent assets.
- Current assets are typically what a company expects to convert into cash within a year’s time, such as cash and cash equivalents, prepaid expenses, inventory, marketable securities, and accounts receivable.
- Noncurrent assets are long-term investments that a company does not expect to convert into cash in the short term, such as land, equipment, patents, trademarks, and intellectual property.
2. Liabilities
A liability is anything a company or organization owes to a debtor. This may refer to payroll expenses, rent and utility payments, debt payments, money owed to suppliers, taxes, or bonds payable.
As with assets, liabilities can be classified as either current liabilities or noncurrent liabilities.
- Current liabilities are typically those due within one year, which may include accounts payable and other accrued expenses.
- Noncurrent liabilities are typically those that a company doesn’t expect to repay within one year. They are usually long-term obligations, such as leases, bonds payable, or loans.
3. Shareholders’ Equity
Shareholders’ equity refers generally to the net worth of a company, and reflects the amount of money that would be left over if all assets were sold and liabilities paid. Shareholders’ equity belongs to the shareholders, whether they be private or public owners.
Just as assets must equal liabilities plus shareholders’ equity, shareholders’ equity can be depicted by this equation:
Shareholders’ Equity = Assets - Liabilities
— Courtesy of Harvard Business School
I hope this helped! :)
When using a ban or quota to correct the common resource problem, the cost that rule-breakers expect to face depends on the-----punishment for rule-breaking and the likelihood of being caught and punished.
What are the main problems with resource use?
In short, raw material extraction and processing always impact on the environment, resulting as they do in soil degradation, water shortages, biodiversity loss, damage to ecosystem functions and global warming exacerbation
What is importance of resources?
Resources are important for us as we utilise them to satisfy our wants. Many minerals like iron, copper, mica etc. are used in industries for manufacturing various goods. Minerals like coal and petroleum are used for the generation of electricity
Learn more about resource:
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<span>This is a negative externality. Since the cost of the traffic being in the community is not being borne by the theatre company itself, it is negative. The community as a whole is having to pay for the extra $5 in costs that will be accrued as a result of selling each ticket.</span>
Answer:
IBM
Journal entries at the inception of the lease
Date Account Titles & Explanation Debit Credit
January 1
Debit Accounts receivable (Sharon Swander Company) $182,000
Credit Leased Asset $182,000
To record the lease of the asset to Sharon Swander.
January 1
Debit Cash $35,685
Credit Accounts receivable (Sharon Swander Company) $35,685
To record the receipt of the first rental payment.
Explanation:
a) Data and Calculations:
Cost of equipment on lease = $182,000
Lease terms:
Lease period = 6 years
Annual rental payments = $35,685
Implicit interest rate = 7%
