Question

Uhura Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansion.

UHURA COMPANY
BALANCE SHEET
FOR THE YEAR ENDED 2014
Current assets
Cash $230,000
Accounts receivable (net) 340,000
Inventory (lower-of-average-cost-or-market) 401,000
Equity investments (trading)-at cost (fair value $120,000) 140,000
Property, plant, and equipment
Buildings (net) 570,000
Equipment (net) 160,000
Land held for future use 175,000
Intangible assets
Goodwill 80,000
Cash surrender value of life insurance 90,000
Prepaid expenses 12,000
Current liabilities
Accounts payable 135,000
Notes payable (due next year) 125,000
Pension obligation 82,000
Rent payable 49,000
Premium on bonds payable 53,000
Long-term liabilities
Bonds payable 500,000
Stockholders

Answer 1

The question involves understanding a balance sheet, an accounting statement outlining a company's financial position, including assets, liabilities, and equity, crucial for analyzing a company's ability to secure expansion funds.

Step-by-step explanation:

The student's question pertains to the balance sheet of the Uhura Company in the context of securing additional funds for expansion. A balance sheet is an essential accounting tool that reflects a company's financial position at a specific point in time by listing its assets, liabilities, and stockholders' equity. Assets, like cash and accounts receivable, represent resources owned by the company. Liabilities, such as accounts payable and bonds payable, indicate obligations the company must fulfill. The difference between the total assets and total liabilities is known as equity or net worth, and it represents the owners' stake in the company. For banks, such as Singleton Bank mentioned in the reference material, the balance sheet also includes specific items like reserves, loans, and deposits, which showcase how banks manage their capital and liquidity.