the balance sheet identity

Prompt: Answer the three questions (your response should be a minimum of 150 words), and submit answers to the problems.

From a Christian worldview, and incorporating the assigned scripture, what does it mean to be ethical in business dealings and corporate governance?

What is the balance sheet identity? Discuss the book value of a firm versus its market value.  What is meant by financial leverage?  What is the definition of a noncash item and describe one noncash item on the income statement?

What is the income statement? The EPS? The net operating income? Discuss other major items on an income statement?


BU, Inc. has current assets of $6,050, net fixed assets of $24,750, long-term debt of $11,400, and current liabilities of $4500. What is the value of the shareholders’ equity account for the firm?  What is the net working capital?

Salty Chips has sales of $862,000, operating costs of $85,000, depreciation expense of $41,000, interest expense of $40,500 and a tax rate of 20%. What is the net income?  What if the firm paid out $125,000 in cash dividends?  What is the addition to retained earnings?


2019                2020



$11,573      $12,936



1661           1736


Cost of goods sold

3979             4707


Other Expenses

946                 824


Interest Expense

776              926



6067            6466


Accounts Receivables

8034             9427


Short-term Notes Payable

1171              1147


Long-term debt

20,320            24,696


Net fixed assets

50,888             54,273


Accounts Payable

4384              4644


Tax rate

34%                34%



14,283             15,288


Payout ratio

33%                   33%


Create the Income Statement and Balance Sheet for 2020.