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Balance Sheet (Assets (Contra-Asset Accounts (Accounts Receivable ->…
Balance Sheet
Assets
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Current Assets:
Cash, Cash Equivs
Short Term Investments
Accounts Receivable
Short-Term Notes Receivable
Interest from Notes Receivable
Inventory
Supplies
Prepaid Expenses
Noncurrent Assets
Long-term investments
PPE (Equipment, Land, Property)
Intangibles
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Liabilities
Current Liabilities
Accounts Payable
Dividends Payable
Accrued Expenses Payable (includes taxes payable)
Short-Term Notes Payable
Interest on Notes Payable
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Stockholder's Equity
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Retained Earnings
Use Initial Retained Earnings + Net Income (from income statement) - Dividends = Ending Retained Earnings
Formatting
Header:
Corporation Name,
"Balance Sheet,"
At Date,
Units
:!:Calculate the totals for:
- Current Assets
- Assets
- Current Liabilities
- Liabilities
- Stockholder's Equity
Use a single line to delineate totals
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Ratios to Memorize
Liquidity (ability to pay debts when due, increases as current assets > current liabilities)
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Quick ratio = Quick Assets (Cash, Accounts Receivable, Securities) / Current Liabilties
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PPE
Depreciation
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Credit Accumulated Depreciation, Debit Depreciation Expense
Depletion
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Debit inventory by the amount depleted, credit accumulated depletion by same amount.
When Impairment Occurs:
- Update depreciation expense until the date of impairment (i.e. debit depreciation expense and credit accumulated depreciation)
- Remove asset value by crediting PPE and debiting accumulated depreciation
- Record cash received or paid by credit/debit Cash
- Credit Gain or Debit Loss in Income Statement - other income
None
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Land (1-time impairment possible),
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When depreciation estimates are revised:
1) Figure out current depreciable amount (NBV)
2) based on current NBV, subtract residual value and divide by REMAINING NUMBER OF YEARS in the NEW LIFE ESTIMATE