Analyzing the strength and weakness from ratios

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Reference no: EM1313984

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?

Verne General Partnership
Balance Sheet
As of December 31, 2008

Assets			Liabilities and Partners' Equity

			Liabilities
Cash		$30,000	Accounts Payable	$25,000
Accounts Receivable		10,000	Accrued Expenses Payable	20,000
Inventory (FIFO)		20,000	Deferred Income from Sales	60,000
Equipment	150,000		Long-term Note Payable	70,000
Less: Accumulated Depreciation	(20,000)	130,000	Total Liabilities		$175,000

Building	650,000		Partners' Equity
Less: Accumulated Depreciation	(70,000)	580,000	Verne	$600,000
Land		80,000	Jules	75,000
			Total Partner's Equity		675,000

Total Assets		$850,000	Total Liabilities and Partners' Equity		$850,000

Reference no: EM1313984

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