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Business Finance EBK HEALTHCARE FINANCE: AN INTRODUCTIO

a. To define: The difference between the long-term investment, equipment and property on balance sheet . Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet. This statement reveals the information about company’s assets and liabilities for a particular period of time. The investment preferably for long-term may include investment in stocks or in debts of another company is recorded at the liabilities side of the balance sheet. Also, annual depreciation expense is charged on property and equipment only. The equipment and the property represent the major assets of the company. They are the fixed assets of the company. Therefore, they are recorded on the assets side in the balance sheet of the company. b. To define: the difference between the gross fixed assets and net fixed assets. Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet. This statement reveals the information about company’s assets and liabilities for a particular period of time. The basic difference between the term gross and net refers to that the gross considered as a whole without factoring other charges like depreciation whereas when net term is used then depreciation is considered. The gross fixed asset is the total value of the assets before factoring accumulated depreciation over the period of time whereas net fixed asset is the value of an asset after factoring accumulated depreciation over the period of time. c. To define: The relationship between the depreciation expense considered in income statement and the accumulated depreciation on the balance sheet. Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet. This statement reveals the information about company’s assets and liabilities for a particular period of time. The depreciation amount revealed in the income statement is for the current year whereas the amount of depreciation shown in the balance sheet is the total accumulated depreciation charged till now. The amount of depreciation recorded in the income statement is transferred to the accumulated depreciation account mention in the balance sheet at the end of every year.

a. To define: The difference between the long-term investment, equipment and property on balance sheet . Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet. This statement reveals the information about company’s assets and liabilities for a particular period of time. The investment preferably for long-term may include investment in stocks or in debts of another company is recorded at the liabilities side of the balance sheet. Also, annual depreciation expense is charged on property and equipment only. The equipment and the property represent the major assets of the company. They are the fixed assets of the company. Therefore, they are recorded on the assets side in the balance sheet of the company. b. To define: the difference between the gross fixed assets and net fixed assets. Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet. This statement reveals the information about company’s assets and liabilities for a particular period of time. The basic difference between the term gross and net refers to that the gross considered as a whole without factoring other charges like depreciation whereas when net term is used then depreciation is considered. The gross fixed asset is the total value of the assets before factoring accumulated depreciation over the period of time whereas net fixed asset is the value of an asset after factoring accumulated depreciation over the period of time. c. To define: The relationship between the depreciation expense considered in income statement and the accumulated depreciation on the balance sheet. Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet. This statement reveals the information about company’s assets and liabilities for a particular period of time. The depreciation amount revealed in the income statement is for the current year whereas the amount of depreciation shown in the balance sheet is the total accumulated depreciation charged till now. The amount of depreciation recorded in the income statement is transferred to the accumulated depreciation account mention in the balance sheet at the end of every year.

Solution Summary: The author explains the difference between the long-term investment, equipment and property on balance sheet.

EBK HEALTHCARE FINANCE: AN INTRODUCTIO

EBK HEALTHCARE FINANCE: AN INTRODUCTIO

6th Edition

ISBN: 9781567938111

Author: Gapenski

Publisher: VST

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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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