CONNECT PLUS-FINANCIAL & MANAGERIAL AC
CONNECT PLUS-FINANCIAL & MANAGERIAL AC
7th Edition
ISBN: 2810020507384
Author: Wild
Publisher: MCG
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Chapter C, Problem 5DQ
To determine

Current Assets:

A current asset can be as the asset of any entity that is in the form of cash, cash equivalent or in a form which can be converted into cash within a year. Generally the current are defined to be the ones which can be liquidated within a year but if the company's operating cycle exceeds one year even though the assets are regarded as current assets until they get converted into cash ultimately as the last stage of operating cycle.

Long-Term Assets:

Long-term assets are the assets possessed by the company which cannot be liquidated before one year. The minimum maturity period for the said assets is one year. These assets are being recorded in the books at the purchase price and are adjusted by the depreciation that takes place due to its use over a period of time and impairment expenses. Also, long term asset of any entity includes its buildings, machineries, fixed assets and long term investments.

Conditions in which the assets should be classified as current assets and as long term assets.

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D E F G H RELATIVE CELL REFERENCES J K L M N A B 1234567 Growth Rate (Expected) Year 0 Year 1 Formulas 4 Investment A 12% $2,200 #N/A 5 Investment B 6 Investment C 1% $2,200 3% $2,200 #N/A #N/A Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 8 "Take each value in column C and multiply it by its adjacent growth rate in column B (which is 1 plus the percentage expected growth)." 9 10 ABSOLUTE CELL REFERENCES 11 12 Growth Rate (Expected) 13 Investment A 12% Year 0 $2,200 Year 1 Year 2 Year 3 Year 4 14 15 Formulas #N/A #N/A #N/A #N/A #N/A 16 #N/A #N/A #N/A #N/A 17 "Start in column D, then move across allowing the column to change, and multiply the preceding value by its FIXED growth rate in cell $B$13 (which is 1 plus the percentage expected growth) to get the current value." #N/A 18 19 FIXED COLUMN / RELATIVE ROW CELL REFERENCES 20 Growth Rate 21 (Expected) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 22 Investment A 23 Investment B 24 Investment C 12% 1% 3%…
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