Instructions: Prepare a statement of financial position and label its parts. After which, answer the following questions: 1. How much is the total current asset of the entity? 2. How much is the total non-current assets of the entity? 3. How much is the total current liability of the entity? 4. How much is the total non-current liability of the entity? 5. How much is the total asset of the entity? 6. What is the ratio of the current assets to the current liabilities?
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Answer:
To prepare a statement of financial position, follow these steps:
1. Determine the date for which you are preparing the statement.
2. List all assets of the entity. Assets are divided into two categories: current assets and non-current assets.
- Current assets typically include items like cash, accounts receivable, inventory, and short-term investments.
- Non-current assets include items like property, plant, and equipment, long-term investments and intangible assets.
3. Total the value of all current assets and label it as "Total Current Assets."
4. Total the value of all non-current assets and label it as "Total Non-Current Assets."
5. List all liabilities of the entity. Liabilities are also divided into two categories: current liabilities and non-current liabilities.
- Current liabilities typically include items like accounts payable, short-term loans, and accrued expenses.
- Non-current liabilities include items like long-term loans and bonds payable.
6. Total the value of all current liabilities and label it as "Total Current Liabilities."
7. Total the value of all non-current liabilities and label it as "Total Non-Current Liabilities."
8. Lastly, calculate the total assets of the entity by adding the value of total current assets and total non-current assets. Label it as "Total Assets."
Now, let's answer the questions based on the statement of financial position:
1. The total current asset of the entity can be found under the "Total Current Assets" section on the statement. The specific value will vary depending on the individual entity.
2. The total non-current assets of the entity can be found under the "Total Non-Current Assets" section on the statement. The specific value will vary depending on the individual entity.
3. The total current liability of the entity can be found under the "Total Current Liabilities" section on the statement. The specific value will vary depending on the individual entity.
4. The total non-current liability of the entity can be found under the "Total Non-Current Liabilities" section on the statement. The specific value will vary depending on the individual entity.
5. The total asset of the entity can be found under the "Total Assets" section on the statement. It is calculated by adding the value of total current assets and total non-current assets.
6. The ratio of current assets to current liabilities is calculated by dividing the total current assets by the total current liabilities.