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From the end of January to the end of December 2010, the XYZ Company experienced the following changes in its assets and liabilities of interest: the company achieved a saving position of $150,000; it sold $150,000 worth of all of its holdings of Canada savings bonds and purchased $100,000 worth of another company's stocks. It paid back a short term loan of $25,000 and invested a total amount of $450,000 in the purchase of new equipment and renovations at its production facilities both in Montreal and Toronto. It decreased its bank deposits by $50,000 and obtained a long term loan of a certain amount from its bank.

(i) Using the flow-of-funds equation, determine what the company's total financial liabilities must have been during the year, 2010.

(ii) Using the TWO METHODS discussed in class, set up the company's flow-of-funds statements for 2010?

(iii) Determine if the company was a net debtor or net creditor during 2010 and calculate by how much such an amount might have been.

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M9522728

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