Questions: Margot, a prospective investor, wants to know how much cash Ziegler Inc. has on December 31. Margot can find the information in Ziegler's: (Select all that apply.)
balance sheet
statement of cash flows
Transcript text: Margot, a prospective investor, wants to know how much cash Ziegler Inc. has on December 31. Margot can find the information in Ziegler's: (Select all that apply.)
balance sheet
statement of cash flows
Solution
The answer is the first one: balance sheet, and the fourth one: statement of cash flows.
Explanation for each option:
Balance Sheet: Correct. The balance sheet provides a snapshot of a company's financial position at a specific point in time, including its assets, liabilities, and equity. Cash is listed as a current asset on the balance sheet, so Margot can find the amount of cash Ziegler Inc. has on December 31 here.
Income Statement: Incorrect. The income statement shows a company's revenues and expenses over a period of time, resulting in net income or loss. It does not provide information about the cash balance at a specific date.
Statement of Stockholders' Equity: Incorrect. This statement shows changes in the equity section of the balance sheet over a period of time, including retained earnings and other equity components. It does not provide specific information about the cash balance.
Statement of Cash Flows: Correct. This statement provides detailed information about a company's cash inflows and outflows over a period of time, categorized into operating, investing, and financing activities. It helps in understanding how cash is generated and used, and it can provide the ending cash balance for the period, which includes December 31.
In summary, Margot can find the cash balance of Ziegler Inc. on December 31 in the balance sheet and the statement of cash flows.