1. (17 Pts) Real vs Financial Assets: XYZ a start-up Food Processing firm. It currently...
80.2K
Verified Solution
Link Copied!
Question
Finance
1. (17 Pts) Real vs Financial Assets: XYZ a start-up Food Processing firm. It currently owns Food Processing equipment worth $130,000 and has cash on hand of $120,000 contributed by XYZ's owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? a. XYZ takes out a bank loan. It receives $150,000 in cash and signs a note promising to pay back the loan over 5 years. b. XYZ uses the cash from the bank plus $120,000 of its own funds to finance the development of new Food Processing plant. C. XYZ sells its final products to ABC, which will market it to the public under the ABC name. XYZ accepts payment in the form of 1,500 shares of ABC stock. d. XYZ sells the shares of stock for $80 per share and uses part of the proceeds to pay off the bank loan. e. Prepare its balance sheet just after it gets the bank loan. What is the ratio of real assets to total assets? f. Prepare the balance sheet after XYZ spends the $270,000 to develop its final product. What is the ratio of real assets to total assets? 9. Prepare the balance sheet after XYZ accepts the payment of shares from ABC. What is the ratio of real assets to total assets
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
