Question

In: Finance

Parmlee Inc. has several assets and liabilities on its balance sheet. For each of the items...

Parmlee Inc. has several assets and liabilities on its balance sheet. For each of the items below, decide whether it is a current asset (CA), current liability (CL), long-term asset (LTA), long-term liability(LTL), or contra-liability (COL).

                                                                                                            CA/CL/LTA/LTL/COL

a. 15 year lease obligation                                                            a. ________

b. Amounts owed to the utility company                                b. ________

c. building owed by the company                                               c. ________

d. Current portion of long-term debt                                       d. ________

*can you please write the answer not pic , thank you

Solutions

Expert Solution

Answer:

a. 15 year lease obligation - LTL (Long-Term Liabilities)

b. Amounts owed to the utility company - CL (Current Liabilities)

c. Building owned by the company - LTA (Long-Term Assets)

d. Current portion of long-term debt - CL (Current Liabilities)

Explanation:

If a company has an obligation but payable after one year from the end of respective reporting period, such obligation shall be considered as Long-Term Liabilities. So, 15 year lease obligation is classified as LTL.

If a company has an obligation but payable within one year from the end of respective reporting period, such obligation shall be considered as Current Liabilities. So, Amount owed to the utility company and Current portion of long-term debt are classified as CL.

If a company owns an asset which has life of more than one year, such asset shall be considered as Long-Term Asset. So, Building owned by the company is classified as LTA.


Related Solutions

A bank has the following assets and liabilities on its balance sheet: Checkable deposits = 160,...
A bank has the following assets and liabilities on its balance sheet: Checkable deposits = 160, Deposits at the FED = 15, Vault cash = 5 Savings deposits = 150, Loans to businesses = 200, Borrowing from the FED = 30, lending to another bank = 20, and Treasury bills = 120. a. Show this bank’s balance sheet, including capital. b. Show the effects on the balance sheet of a 7% default rate on Loans to business. c. (Back to...
VITALSTATISTIX, INC. 2017 Balance Sheet Items Assets Liabilities and Owners’ Equity Cash $200 Accounts Payable $200     ...
VITALSTATISTIX, INC. 2017 Balance Sheet Items Assets Liabilities and Owners’ Equity Cash $200 Accounts Payable $200      Accounts Receivable 400 Notes Payable 100 Inventory 650 Long-Term Debt 1,050 Net Plant and Equipment 2,400 Common Stock 500       Paid-in Surplus 1,500                                                                   Retained Earnings 300 VITALSTATISTIX, INC. 2017 Income Statement Sales $2,700 Cost of Goods Sold 800 Depreciation     100 Earnings Before Interest and Taxes $1,800 Interest Paid      150 Taxable Income $1,650 Taxes     550 Net Income $1,100 13. Vitalstatistix, Inc. has 500 shares of common...
Your firm has the following balance sheet statement items: total current liabilities of $805,000; total assets...
Your firm has the following balance sheet statement items: total current liabilities of $805,000; total assets of $2,886,875; net fixed assets of $1,842,823; and long-term debt of $200,000. What is the amount of the firm's total current assets?
1. A given bank has the following interest‐sensitive assets and liabilities on its balance sheet (in...
1. A given bank has the following interest‐sensitive assets and liabilities on its balance sheet (in $ millions). If the interest rate rises by 1.5%, what is the change of profit? Interest rate sensitive assets Interest rate sensitive liabilities Short term securities $150 Deposits $659 Loans $575 2 Based on the answer to the previous question, should the bank be concerned about a decrease in interest rates? No. Decrease is favorable to the bank because it has a negative interest...
Killer Whale, Inc. has the following balance sheet statement items: total current liabilities of $659,565;
Killer Whale, Inc. has the following balance sheet statement items: total current liabilities of $659,565; net fixed and other assets of $1,517,190; total assets of $3,024,337; and long-term debt of $945,015. What is the amount of the firm’s current assets?
define balance sheet assets liabilities equity
define balance sheetassetsliabilitiesequity 
Higginbotham, INC Balance Sheet ($000) Assets                  Liabilities and Stockholder’s Equity Cash         
Higginbotham, INC Balance Sheet ($000) Assets                  Liabilities and Stockholder’s Equity Cash                                  $ 1,500 Marketable Securities          2,500 Accounts Receivable          15,000 Inventory                            33,000     Tot. Curr. Assets           $52,000 Fixed Assets (net)               35,000     Total Assets                  $87,000 Accounts Payable                    $12,500 Notes Payable                            12,500     Tot. Current Liab.                $25,000 Long-term Debt                         22,000    Total Liabilities                    $47,000 Common Stock (par)                    5,000 Paid-in Capital                            18,000 Retained Earnings                       17,000      Total Stock Equity               $40,000 Tot Liab. And Stockholder             Equity                            $87,000                                           Higginbotham, INC Income Statement ($000)...
Megalopolis Bank has the following balance sheet and income statement. Balance Sheet (in millions) Assets Liabilities...
Megalopolis Bank has the following balance sheet and income statement. Balance Sheet (in millions) Assets Liabilities and Equity Cash and due from banks $ 9,400 Demand deposits $ 23,000 Investment securities 27,000 NOW accounts 93,000 Repurchase agreements 46,000 Retail CDs 32,000 Loans 94,000 Debentures 23,000 Fixed assets 19,000 Total liabilities $ 171,000 Other assets 4,400 Common stock 12,000 Paid-in capital 4,000 Retained earnings 12,800 Total assets $ 199,800 Total liabilities and equity $ 199,800 Income Statement Interest on fees and...
Nittany, Inc. had the following balances on its balance​ sheet: Assets Liabilities December 31, 2018 $300,000...
Nittany, Inc. had the following balances on its balance​ sheet: Assets Liabilities December 31, 2018 $300,000 $250,000 December 31, 2019 $400,000 $320,000 During​ 2019, Nittany, Inc. had revenues of​ $850,000 and expenses of​ $650,000. No new stock was issued. The amount of dividends for 2019 was​ ________.
Assume that XYZ tires has the following totals on its balance sheet: Assets: $100,000 Liabilities: $40,000...
Assume that XYZ tires has the following totals on its balance sheet: Assets: $100,000 Liabilities: $40,000 XYZ Tires now borrows $50,000 from the bank. 1. How will the totals for assets and liabilities be affected by the loan? Explain. 2. Is the borrowing a good idea for the business? Why or why not? 3. How might the business use the $50,000? 4. What other information would be useful to have before deciding to take out the loan?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT