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You have already studied classified balance sheet in the third chapter of this course

Accounting

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You have already studied classified balance sheet in the third chapter of this course. The following partial classified balance sheet contain some notes that need to be identified and highlighted to expand your knowledge and background in this regard.

Assets:
Current Assets:
Cash	$100,000
Unclaimed payroll checks	27,500
Trading securities (fair value $30,000) at cost	37,000
Accounts receivables (less bad debt reserve)	75,000
Inventories (at lower of cost or market)	240,000
Total Assets	479,500
Tangible Assets:
Land (less accumulated depreciation)	80,000
Building (net of depreciation)	550,000
Net tangible assets	630,000
Long-term Investment:
Stocks and bonds	100,000
Treasury stock	70,000
Total long-term investments	170,000
Other Assets:
Discount on bond payable	19,400
Sinking fund	975,000
Other total assets	994,000
Total Assets	2,273,900

 

In view of careful investigation of the above format, indicate the following:

1: Deficiencies of the classified balance sheet, if any? (1.5 Mark)

2: Limitationsof balance sheet, if any? (1.5 Mark)

3: Ethical issues involved in the above format of the classified balance sheet? (1.5 Mark)

4: Completeness of classified balance sheet? (1.5 Mark)

 

Part Two:

Presented below is the classified balance sheet for one of businesses:

 

ABC PLC Consolidated Balance Sheet at December 31, 2019
CAPITAL EMPLOYED
Fixed Assets:
Intangible Assets	216,7 M
Tangible Assets	793,7
Investments	7,4
	1,017,8
Current Assets
Stock	373,9
Debtors	624,2
Cash	175,6
	1,173,7
Current Liabilities
Creditors: amounts falling due within one year	(502,3)
Net current assets	671,4
Total assets less current liabilities	1,689.2
Creditors: amounts falling due after more than one year	(488,4)
Provisions for liabilities and charges	(423,5)
Net Assets	777,3
CAPITAL AND RESERVES
Called up share capital
Ordinary shares	38,7
Convertible cumulative preference shares	337,2
Redeemable convertible cumulative preference shares	-
	375,9
Share premium account	92,8
Capital redemption reserve	461,9
Own shares	(6.4)
Profit and loss account	(180,2)
Shareholders’ Funds
Equity shareholders’ funds 406,8
Non-equity shareholders’ funds 337,2
	744,0
Equity minority interest	33,3
	777,3

 

Required:

1. Identify how format of the above classified balance sheet provides useful information (1 mark)

2. Identify at least three differences in balance sheet reporting between British and U.S. firms as shown in the above balance sheet. (1.5 mark)

3. Calculate at least three financial ratios by using the information available in the above format of balance sheet (1.5 mark).

Notes:

Please note that the writing should be in essay style,the report should contain between 800 to 1000words (no less than 800 words). Use Times New roman with font size 12. Title page should be included (name and student identity number). You are required to support your answer using textbook references, at least four references, the references used should be cited in the text and included in the references list at the end of the report. Due date for submitting the case study is 8 November 2020 (midnight) using theSafe Assignment.Note that if the electronic version is submitted after the deadline date, three marks will be deducted from the project weight before marking.