Practice Questions

   Case 1
 
1. Check whether the accounting equation works
 
    Total assets = Total liabilities + Total stockholders' equity
    $1,155,000 = $610,000 + $545,000
 
 

Cash and cash equivalents	20,000
Receivables	25,000
Short-term investments	160,000
Inventories	155,000
Prepaid expenses	25,000
Total Current Assets	385,000
Long-term receivables	70,000
Long-term investments	150,000
Property, plant and equipment	510,000
Less: Accumulated depreciation	(110,000)
Goodwill	90,000
Other Intangible assets	60,000
Total Assets	1,155,000
Accounts payable	75,000
Notes payable	70,000
Short-term borrowings	80,000
Income taxes payable	60,000
Total Current Liabilities	285,000
Long-term notes payable,	55,000
Long-term borrowings	120,000
Bonds payable	150,000
Total Liabilities	610,000
Common stock	75,000
Preferred stock	37,000
Additional paid-in capital	170,000
Retained earnings	263,000
Total Stockholders' Equity	545,000
Total Liabilities and Stockholders' Equity	1,155,000