At the end of its first year of operations, shapiro's consulting services reported net income of $27,000. they also had account
balances of: cash, $16,000; office supplies, $3,200; equipment, $24,000 and accounts receivable, $8,000. the owner's total investment for this first year was $15,000 and the owner withdrew $2,000 for personal use. what are the total liabilities of shapiro's consulting services at the end of the first year of operations?
Note that the total assets is obtained by adding the amount (or value) of the all the assets listed above.
Since the net income is an increase (or decrease if it's a net loss) of capital, we classify net income as capital. In particular, the net income of Shairo's at the end of first year adds to the capital at the start of first year.
Moreover, the withdrawal of money by the owner also decreases the capital.
Thus, the total capital at the end of first year is calculated as follows:
Capital (start of the year): $15,000 Net Income (end of year): $27,000 Withdrawal Amount: ($2,000) TOTAL CAPITAL: $40,000
Note: ($2,000) means -$2,000. This notation is used in accounting.
Hence using equation (1), the total liabilities at the end of first year is given by
<span>If the required reserve ratio, m, is 20 percent, then the oversimplified money multiplier is five. The money multiplier is also called as the monetary multiplier and the multiplier effect. It usually depends on the amount of the various deposits. </span>
There are various steps to prepare the financial statements. These are as follows:
1. Journalizing: It is a recording of business transaction with a narration in which the one account is debited and the other account is credited. It can be more transactions debited and credit that is depending upon the nature of the transaction.
2. Ledger posting: After recording the journal entries, the next step is to make the number of ledger i.e posting of the amount and the accounts to their respective ledger i.e sales ledger, purchase ledger, etc
Considerando que Basílio seja Fernando e ele tenha dinheiro para investir na empresa (não é dito se ele precisa arrecadar o capital de fora ou não), a melhor opção seria capital próprio, onde ele teria completo controle sobre a empresa e qualquer decisão gerencial sairá dele e dele apenas. Caso ele não tenha capital para investir, a opção que menos deixa ele dependendo de outra pessoa seria o financiamento bancário, onde as decisões continuam com ele, tendo ele apenas que pagar o financiamento ao banco.
Principle of Revenue recognition, is the one of the foremost and vital principle of accounting, which is also the cornerstone of the accrual accounting along with the matching principle.
Under this principle, the revenues are recognized or ackowledged when they are realized or earned, which is generally when the goods are transferred or the services are rendered, irrespective of when cash is received.
So, the rule which says revenue to be recognized when earned and measure the revenue amount equal to value of non- cash assets received from clients is known as revenue recognition principle.
If country A allocates more resources to producing capital goods than does country B so less consumption goods will be getting by company B but will have more in the future. In addition to macroeconomics, economics is the study of allocating limited resources in order to satisfy a list of unlimited wants. Economics tries to examine situations in which individuals choose how to do things, when to do things and with whom to do.
