I have the following items listed on a balance sheet and income statement:
Balance Sheet:
Cash
Accounts Receivable
Inventory
Prepaid Expenses
Equipment
Accumulated Deprecation
Accounts Payable
Income Taxes Payable
Dividends Payable
Salaries Payable
Interest Payable
Notes Payable - Current Portion
Notes Payable - Long Term Portion
Prefered Stock
Common Stock
Additional Paid In Capital
Retained EArnings
Income Statement:
Sales
Cost of Goods Sold
Sales and Wages Expenses
Deprecation Expenses
Operating Expenses
Income from Operations
Interest Expense
Loss on Sale of Computer equipment
Income before tax
Income Tax Expense.
How do I find or Which of these do I use to find
1. Short Term Debt
2. Long Term Debt
To find short-term and long-term debt, you can use the following items from the balance sheet:
1. Short-term Debt:
- Accounts Payable: This represents the amount owed to suppliers for purchasing goods or services on credit, typically due within a short period.
- Income Taxes Payable: This represents the amount of corporate income taxes owed to the government, typically due within a short period.
- Dividends Payable: This represents the amount of dividends declared but not yet paid to shareholders, typically due within a short period.
- Salaries Payable: This represents the amount owed to employees for wages earned but not yet paid, typically due within a short period.
- Interest Payable: This represents the amount of interest due on outstanding debts, typically due within a short period.
- Notes Payable - Current Portion: This represents the portion of long-term debt that is due within the next year.
2. Long-term Debt:
- Notes Payable - Long Term Portion: This represents the portion of long-term debt that is not due within the next year. It includes debts with repayment terms longer than one year.
- Preferred Stock: Although preferred stock represents equity rather than debt, it is sometimes considered as part of a company's long-term financing structure.
To summarize:
- Short-term Debt: Accounts Payable, Income Taxes Payable, Dividends Payable, Salaries Payable, Interest Payable, Notes Payable - Current Portion.
- Long-term Debt: Notes Payable - Long Term Portion (excluding the current portion), Preferred Stock (not technically debt but part of long-term financing).
Please note that this is a general guideline, and the specific classification of short-term and long-term debt may vary based on accounting standards and individual company circumstances. It is always advisable to refer to the financial statements and disclosures of the company in question for accurate information.
To find the short-term debt and long-term debt, you need to look into the accounts listed on the balance sheet. Let's break it down:
1. Short-Term Debt:
Short-term debt refers to the portion of debt that is expected to be repaid within one year. Typically, it includes accounts that indicate obligations that will be settled in the near future. The following items on the balance sheet might help find the short-term debt:
- Notes Payable - Current Portion: This account records obligations that need to be repaid within the current year.
- Accounts Payable: This account represents amounts owed to suppliers or vendors for goods or services received but not yet paid for.
- Income Taxes Payable: This account reports the amount of income taxes that have been incurred during the period but not yet paid.
- Dividends Payable: This account reflects the amount of dividends declared by the company but not yet paid out to shareholders.
- Salaries Payable: This account represents the amount of wages or salaries owed to employees but not yet paid.
To find the short-term debt, you would sum up the balances of these accounts.
2. Long-Term Debt:
Long-term debt refers to the portion of debt that is expected to be repaid over a period exceeding one year. It includes obligations that are not due within the current year. The following item on the balance sheet can help find the long-term debt:
- Notes Payable - Long Term Portion: This account records the portion of notes payable that extends beyond the current year.
To find the long-term debt, you would look at the balance of the "Notes Payable - Long Term Portion" account.
It's important to note that the specific categorization of short-term and long-term debt may vary depending on accounting standards or the company's specific circumstances. Reviewing the notes to the financial statements or consulting with a financial professional can provide more detailed information about the debt classification.