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Business Finance EBK HEALTHCARE FINANCE: AN INTRODUCTIO

The difference between gross and net figures of property and equipment. Introduction: ‘ Balance Sheet ’ shows the liabilities, assets and equity of a company at a particular point of time. Assets are the items that the company own, liability is the obligation of the company and equity is the net assets, i.e., the difference between the assets and the liabilities. Assets are the items that the company own. These are further classified as current and non-current assets wherein: Current assets are convertible to cash and equivalents within a year to pay off current liabilities and cover up current expenses. Non-current assets aren’t convertible to cash within a year. They are held for a long term as a purpose of investment. Intangible assets are the assets that an individual cannot see, touch or feel, though holds value as they provide future benefits to the company. Property and equipment is said to be a noncurrent asset with long term investment. Depreciation is a decrease in the value of asset due and tear of a fixed asset over its useful life. Thus, it is a non-cash expense. Total expenses includes cash as well as non-cash expenses i.e., any expense incurred during the financial year, whether paid or not. Gross property and equipment: It is the value of property and equipment before depreciation expense is applied or deducted. Net property and equipment: It is the value of property and equipment before depreciation expense is applied or deducted. Thus, it is computed as gross property and equipment less the depreciation expense.

The difference between gross and net figures of property and equipment. Introduction: ‘ Balance Sheet ’ shows the liabilities, assets and equity of a company at a particular point of time. Assets are the items that the company own, liability is the obligation of the company and equity is the net assets, i.e., the difference between the assets and the liabilities. Assets are the items that the company own. These are further classified as current and non-current assets wherein: Current assets are convertible to cash and equivalents within a year to pay off current liabilities and cover up current expenses. Non-current assets aren’t convertible to cash within a year. They are held for a long term as a purpose of investment. Intangible assets are the assets that an individual cannot see, touch or feel, though holds value as they provide future benefits to the company. Property and equipment is said to be a noncurrent asset with long term investment. Depreciation is a decrease in the value of asset due and tear of a fixed asset over its useful life. Thus, it is a non-cash expense. Total expenses includes cash as well as non-cash expenses i.e., any expense incurred during the financial year, whether paid or not. Gross property and equipment: It is the value of property and equipment before depreciation expense is applied or deducted. Net property and equipment: It is the value of property and equipment before depreciation expense is applied or deducted. Thus, it is computed as gross property and equipment less the depreciation expense.

Solution Summary: The author explains the difference between gross and net figures of property and equipment. Assets are the items that the company own.

EBK HEALTHCARE FINANCE: AN INTRODUCTIO

EBK HEALTHCARE FINANCE: AN INTRODUCTIO

6th Edition

ISBN: 9781567938111

Author: Gapenski

Publisher: VST

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Chapter 4, Problem 2.3STQ

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Chapter 4 Solutions

EBK HEALTHCARE FINANCE: AN INTRODUCTIO

Ch. 4 - Prob. 1.1STQ Ch. 4 - Prob. 1.2STQ Ch. 4 - Prob. 1.3STQ Ch. 4 - Prob. 1.4STQ Ch. 4 - Prob. 2.1STQ Ch. 4 - Prob. 2.2STQ Ch. 4 - Prob. 2.3STQ Ch. 4 - Prob. 2.4STQ Ch. 4 - Prob. 2.5STQ Ch. 4 - Prob. 3.1STQ

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