PDA

View Full Version : How do I calculate the long-term debts in a balance sheet?


patty4
Apr 21, 2009, 12:17 PM
The given information is:

Accumulated Depreciation $38,000
Long-term debt? (how do I find this)
Inventory 5,000
General and administrative expenses 1,000
Interest Expense 1, 200
Common Stock 50,000
Cost of Goods Sold 6,000
Short-term notes 750
Depreciation Expense 600
Sales 13,000
Accounts Receivable 10,000
Accounts Payable 5,000
Buildings and Equipment 120,000
Cash 11,000
Taxes 1,300
Retained Earnings 10, 250

It also asked to prepare an income statement as well. Is there anyone that can help me.

morgaine300
Apr 21, 2009, 04:42 PM
Assuming there are no other accounts besides those listed, you need to list them out by debit and credit columns, then add them, and the difference will be the long term debts. That is, it's the missing number you'd need to make it balance.

You can also do it by completing that income statement, updating retained earnings and making a balance sheet, and again the long-term debt would be the missing number to make it balance. But probably more chance of error that way.

As for an income statement, it only contains revenues and expenses. I would presume there's an example in your textbook but just in case, there's an example here:
Multiple-Step Income Statement | AccountingCoach.com (http://www.accountingcoach.com/online-accounting-course/04Xpg04.html#income-statement-multiple-step)