if the following items are on a balance sheet. howmuch are the total assets of...

if the following items are on a balance sheet. how much are the total assets of the company?

plant and equipment $41,800
common stock $15,000
cash $7,900
inventory $23,000
bad debt reserve $6,000
additional paid in capital $6,000
accumulated depreciation $25,300
accounts receivables $22,000

what the total assets?

Solutions

Expert Solution

Solution:
	The total assets = 63,400

Working Notes:

	Computation total assets
			Amount
	Plant and equipment	41,800
	Less: accumulated depreciation	25,300	16,500

	cash		7,900
	inventory		23,000
	accounts receivables	22,000
	Less: bad debt reserve	6,000	16,000

	The total assets		63400


Notes:	Common stock & additional paid in capital is not assets .
	Bad debt reserve is created for accounts receivable that is not be realized, hence it is deducted from Accounts receivable to get assets value


	Accumulated depreciation is reserve created against plant and equipment for it annual depreciation cost , hence net value of plant & equipment we get after deducting it from Plant and equipment value.

jeff jeffy answered 1 year ago

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