Noncurrent assets

AU other noncurrent assets 5.4 Noncurrent debt unsubordinated 18.3... 

Current assets Petty cash Cash in bank Accounts receivable Allow for doubtful accounts Inventory—prescription Inventory—other Prepaid federal income tax Prepaid state income tax Total current assets Noncurrent assets Automobiles Machinery equipment Office equipment Leasehold improvements Accumulated depreciation Total noncurrent assets Total assets... 

The second part of the balance sheet in Table 16.3 lists the liabilities and stockholders equity. Current liabilities include all payments that must be made by the company within one year. The total for U.S. Chemicals is 4,153,(XX),0(X). Long-term debts, often in the form of bonds, are due after more than one year from the date of the balance sheet. They total 3,943,(XX),000. Other noncurrent liabilities total 1,754,(XX),(XX) and include pension and other postretirement benefits as well as reserves for any company operations that are discontinued. Total liabilities are 9,850,000,000. We note that liabilities are less than assets by 4,361,(XX),0(X). Thus, by Eq. (16.1), this difference must be the stockholders equity. This equity includes the par value of issued common stock, which totals 1,(XK),000,(X)0. The par value of a share of stock is an arbitrary amount that has no relationship to the market value of the stock, but is used to determine the amount credited to the stock account. If the stock is issued for more than its par value, the excess is credited to the account shown as capital in excess of par value. In Table 16.3, the par value is 1.00 per share but the stock was issued at 4.23 per share. Companies frequently repurchase shares of their common stock, resulting in a reduction of stockholders equity. Because the shares are placed in a treasury, the transaction appears as treasury stock at cost. In Table 16.3, that amount is 3,428,000,000. The other account under stockholders equity is retained earnings, which is the accumulated retained earnings that is increased each year by net income. Tte amount of this entry must be such that Eq. (16.1) is satisfied. This is seen to be tte case in Table 16.3, where the net stockholders equity is 4,361,000,000, giving total liabilities plus stockholders equity as 14,211,000,000, which is equal to total assets. 

Assets are further classified as current or noncurrent (long-term) assets, separated only by the time the company thinks it will hold the asset. You can also think of this in the following way, how liquid is the asset Current assets are held for 1-year or less. These include cash, inventory, and receivables. Noncurrent or long-term assets are held longer than 1 year. Long-term fixed assets, such as plant, property, and equipment (PP E), have three common characteristics ... 

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