Question

Requirement 1. Use these data to write Burn ​Foods' accounting equation. Now enter the amounts under the appropriate headings. ​(Round all answers to one decimal. Leave any unused cells​ blank.)

1. Fill in the blanks to complete the accounting equation.

=

+

Assume Burn Foods Inc. has current assets of $628.9 ​million, capital assets of $1,175.6 ​million, and other assets totalling $1,281.4 million. Current liabilities are $592.3 million and​ long-term liabilities total $1,240.6 million. Required 1. Use these data to write Burn ​Foods' accounting equation. 2. How much in resources does Burn Foods have to work​ with? 3. How much does Burn Foods owe​ creditors? 4. How much of the​ company's assets do the Burn Foods shareholders actually​ own? Requirement 1. Use these data to write Burn ​Foods' accounting equation. Now enter the amounts under the appropriate headings. ​(Round all answers to one decimal. Leave any unused cells​ blank.)

Current
Capital
Other
Total			=		+

Requirement 2. How much in resources does Burn Foods have to work​ with?

The amount of resources to work with is nothing

million.

Requirement 3. How much does Burn Foods owe​ creditors?

The amount owed to creditors is nothing

million.

Requirement 4. How much of the​ company's assets do the Burn Foods shareholders actually​ own?

The amount actually owned by the shareholders is nothing

million.

Answer 1

Requirement 1 .Fill in the blanks to complete the accounting equation.

Assets

=

Liabilities

+

Owner's equity/Capital

Enter the amounts under the appropriate headings.

		Assets	=	Liabilities	+	Owner's equity/Capital
Current		$628.9 million		$592.3 million
Capital		$1,175.6 million		$1,240.6 million
Other		$1,281.4 million		Nil
Total		$3085.9 million	=	$1,832.9 million	+	$1,253 million

Explanation: According to Accounting equation, Assets = Liabilities + Owner's equity/Capital. In this case, the values are given for the Assets and Liabilities classification like; current and capital. Capital classification otherwise called as Long- term in case of Liabilities.

Owner’s Equity/ Capital is not given in this case; therefore, we can use Accounting equation to get the value of Owner’s Equity/ Capital;

Assets = Liabilities + Owner’s Equity/Capital

$3085.9 million = $1,832.9 million + Owner’s Equity/Capital                                     

$3085.9 million - $1,832.9 million = Owner’s Equity/Capital

Owner’s Equity/Capital = $1253 million

Requirement 2. How much in resources does Burn Foods have to work​ with?

The amount of resources to work with is $3085.9 million.

Explanation; The amount of resources to work with for a company means the resources which are owned by the company. So, we have to take all the “Assets” including ‘Current, Capital and other Assets’. Here, the Total Assets of Burn Foods is calculated as $3085.9 million.

Requirement 3. How much does Burn Foods owe​ creditors?

The amount owed to creditors is $1,832.9 million.

Explanation; The amount owed to creditors for company means the amount of all debt and obligations by the company to others. So, all these debt and obligations are coming under the “Total Liabilities”. Here, the Total Assets of Burn Foods is calculated as $1832.9 million.

Requirement 4. How much of the​ company's assets do the Burn Foods shareholders actually​ own?

The amount actually owned by the shareholders is $1253 million.

Explanation; The amount actually owned by the shareholders means the amount of our company’s stock owned by others. These are the Investment for stockholders and Capital to our company. Here, the Owner’s Equity/ Capital of Burn Foods is calculated as $1253 million.