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Introduction to the Corporate Annual Report:A Business Application, Canadian Edition - Assignment Example
Author : cedrick43
Finance & Accounting
Pages 11 (2761 words)
Introduction to the Corporate Annual Report: A Business Application, Canadian Edition (Template) Chapter 3 – Financial Statements Balance Sheet Chapter 3: Balance Sheet—Question 1 Identify the date shown at the top of your selected company’s balance sheet…
Explain why the order of individual items begins with cash. In your opinion, would it be more or less appropriate to order these items according to dollar magnitude? Explain. By reviewing the current asset section of the balance sheet of the company, it can be observed that the order of individual items start with cash and end at derivative assets. The company has utilized the order of showing more liquid assets first followed by relatively less liquid assets. Dollar magnitude convention is generally not followed. Chapter 3: Balance Sheet—Question 3 Review your company’s balance sheet and compare accumulated amortization to the historical cost of Plant and Equipment (PE) using the following ratio. You may have to refer to the notes to the financial statements to gather the detailed information necessary to complete this question. 1 – (Accumulated amortization ? PE) = Percentage of Asset Life Remaining 1 – (20,347 ? 28,311) = 28.13% ¦ Low percentage means older assets ¦ High percentage means newer assets Is the investment in fixed assets, on average older or newer? If older, can we assume that these assets will be replaced shortly? The percentage of assets remaining life is 28.13% which shows that the fixed assets are generally older and they would be replaced shortly within next 2 to 3 years. ...