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Consider the following abbreviated financial statements for Weston Enterprises: a. What is owners? equity for 2018 and

Question:

Consider the following abbreviated financial statements for Weston Enterprises:

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a. What is owners? equity for 2018 and 2019?

b. What is the change in net working capital for 2019?

c. In 2019, Weston Enterprises purchased $2,820 in new fixed assets. How much in fixed assets did Weston Enterprises sell? What is the cash flow from assets for the year? The tax rate is 22percent.

d. During 2019, Weston Enterprises raised $545 in new long-term debt. How much long-term debt must Weston Enterprises have paid off during the year? What is the cash flow to creditors?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Cash Flow From Assets
Cash flow from assets is the aggregate total of all cash flows related to the assets of a business. This information is used to determine the net amount of cash being spun off by or used in the operations of a business. The concept is comprised of...
Transcribed Image Text:

WESTON ENTERPRISES Partial Balance Sheets Liabilities and Owners' Equity Assets 2018 2019 2018 2019 Current liabilities $ 481 $ 534 Current assets $1,157 $1,411 Net fixed Long- term 5,261 debt 6,125 2,856 3,256 assets WESTON ENTERPRISES 2019 Income Statement Sales $17,688 7,118 1,478 392 Costs Depreciation Interest paid

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a Total assets 2018 1157 5261 6418 Total liabilities 2018 481 2856 3337 Owners equity 2018 6418 3337 ...View the full answer


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Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

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