ACCT SLP 4: Balance Sheet - Essay Example

any provides an overview of the monetary worth of the assets of the business such that its total assets are increased to $1,009,700 as compared to a previous balance sheet in which the total assets worth only $482,200. There are major reasons due to which such a big increase can be observed. The first change is regarding the inventory valuation such that the inventory was undervalued by $42,500 in the previous balance sheet. The company has channelized new funds by issuing offerings of stock to shareholders and raised around $150,000, which increased the cash of the company.

Besides that, the company manages to purchase a piece of land amounting to $400,000, which was partially financed though cash and $350,000 through notes payable to bank in the form of long-term debt. The company also had healthy profits such that it generated around $151,150 in the form of net income, which increased the equity position of the company. Due to sound cash position, the company paid $15,000 dividends to its shareholders; as a result, the retained earnings of the previous year are reduced.

Benedicto, M.S. (2008) Introduction to Financial Accounting. IE Business School. This is a multimedia presentation reviewing the four financial statements. The information is also available in a PDF file.  Click on “accounting equation” tab. Retrieved fromhttp://openmultimedia.ie.edu/openproducts/financial_accounting/financial_accounting/frames.html Edwards, J.D. & R.H. Hermanson (2007) Accounting Principles: A Business Perspective. Volume 1 Financial Accounting. The Global Text Project, Ch. 16. Retrieved from