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Real-Life Activities

Real-Life Math

An investor suspects that a company he invested in called Anne's Fruit Emporium isn't being truthful about its profits. After hearing from a few other complainants, you decide it's time to investigate the company.

One of the first things you do is look at the balance sheet for Anne's Fruit Emporium. This tells you what assets and liabilities the company has.

"You need to understand basic accounting skills," says Deborah Bortner. She is a securities administrator. "You need to be able to look at a balance sheet and figure out what is going on."

Securities administrators need to have an understanding of these types of math skills, but they don't need to be experts. "If I need to get in-depth information, I go down the hall to the accounting department," she adds.

Anne's Fruit Emporium Balance Sheet for 2003 and 2004

Current assets

20032004
Cash and cash equivalents:$5,000$5,000
Accounts receivable:$20,000$40,000
Inventory:$12,000$10,000
Total current assets:$37,000$55,000

Fixed assets

20032004
Farm equipment:$20,000$45,000
Less depreciation:-$8,000-$10,000
Land:$15,000$25,000

Questions:

  1. What are the total fixed assets for 2003?
  2. What are the total fixed assets for 2004?
  3. What are the total assets for 2003?
  4. What are the total assets for 2004?