Answered: Given Below is the Balance sheet of ABC…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Given Below is the Balance sheet of ABC Co. Analyze the Balance Sheet and Calculate the Current Ratio.

Liabilities Amount Assets Amount

Share Capital 50,000 Fixed Asset 1,24,000

Preference Share Capital 30,000 Short Term Capital 10,000

General Reserve 40,000 Debtors 95,000

Debentures 60,000 Stock 50,000

Trade Payable 10,000 Cash and Bank 15,000

Bank Overdraft 20,000 Discount on Share Issue 6,000

Provision for Tax 40,000

Provision for Depreciation 20,000

3,00,000 3,00,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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