Analyzing The Strength and weakness from Ratios.
The balance sheet for Verne General Partnership appears below. Based solely on this balance sheet, do you see any potential difficulties Verne may have? What strengths does the balance sheet show? Explain. What would you learn from examining the income statement for the year ended 2008?
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Verne General Partnership
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Balance Sheet
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As of December 31, 2008
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Assets
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Liabilities and Partners' Equity
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Liabilities
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Cash
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$30,000
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Accounts Payable
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$25,000
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Accounts Receivable
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10,000
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Accrued Expenses Payable
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20,000
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Inventory (FIFO)
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20,000
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Deferred Income from Sales
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60,000
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Equipment
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150,000
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Long-term Note Payable
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70,000
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Less: Accumulated Depreciation
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(20,000)
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130,000
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Total Liabilities
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$175,000
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Building
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650,000
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Partners' Equity
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Less: Accumulated Depreciation
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(70,000)
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580,000
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Verne
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$600,000
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Land
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80,000
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Jules
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75,000
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Total Partner's Equity
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675,000
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Total Assets
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$850,000
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Total Liabilities and Partners' Equity
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$850,000
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