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    emerald1710's Avatar
    emerald1710 Posts: 4, Reputation: 1
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    #1

    Sep 18, 2009, 02:35 PM
    Accounting equation - Corporation
    These items were taken from balance sheet. Classify each of them as a liabilities(L), asset(A) or, shareholder's Equity(SE). Show the amounts in accounting equation.
    I did this bit there is something wrong. Could you help me?

    Account receivable - A - $a
    Account payable - L - $b
    Cash - A - $c
    Inventories - A - $d
    Investments - SE - $e
    Equipment - A - $f
    Notes payable - L - $g
    Other assets - A - $h
    Other liabilities - L - $i
    Retained earnings - SE - $j
    Share capital - SE - $k
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Sep 18, 2009, 02:39 PM
    "Investments" is actually an Asset, rather than a part of Shareholders Equity. Make that one change, and you should be good to go.
    emerald1710's Avatar
    emerald1710 Posts: 4, Reputation: 1
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    #3

    Sep 18, 2009, 02:41 PM
    Thank you!
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #4

    Sep 18, 2009, 05:34 PM

    Don't confuse what has been invested into the company (stock) with outside stuff the company itself invests in. We don't just invest in companies - companies invest it other things as well.
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