BALANCE SHEET ANALYSIS

ON

TANDY’S UBER SERVICE

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Part 1

# The un-jumbled balance sheet is as below

Balance Sheet for Tandy's Uber Service

On the 31st December 2015
Assets $ $
Non-current assets 38,000.00
Automobiles 38,000.00

Current assets 23,900.00

Cash 19,900.00
Accounts Receivable 2,800.00
Automobile supplies 1,200.00

Total assets 61,900.00

Equity and liabilities $ $

Owner's Equity 28,350.00
Common Stock 8,000.00
Retained Earnings 20,350.00

Non-current liabilities 30,350.00

Notes payable 30,350.00
Current liabilities 3,200.00
Accounts Payable 3,200.00

Total equity and liabilities 61,900.00

BALANCE SHEET FOR TANDY’S UBER SERVICE

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Part 2

1. What is the time period covered by the statement?

A balance sheet often states that it is prepared as of a specific date, referred to as the balance sheet
date. The balance sheet reports on a company’s financial conditions, namely the values of the
company’s assets, liabilities and shareholders’ equity. Values are measured in terms of their monetary
amounts at particular points in time rather than over any periods. So, the balance sheet date of Tandy’s
Uber Service is at 31st December, 2015.

2. How does this differ from the income statement?

Companies prepare the balance sheet and the income statement periodically at the end of each
accounting cycle. While a balance sheet relates to a specific date or a given point within an accounting
cycle, an income statement is concerned about a particular period, or the time during an accounting
cycle. Companies use the balance sheet to report their financial conditions that can be measured only at
a point in time, and the income statement to report their financial performance that is tracked often
over a period of time. For example, if the reporting cycle for Tandy’s Uber Service is yearly, then the
income statement time period of Tandy’s Uber Service is one year from 1 st January 2015 to 31st
December 2015, while the balance sheet is dated as of 31 st December 2015.

3. What is the total equity?

Equity is the value of the business left to its owners after the business has paid all liabilities.
Sometimes, there are different classes of ownership units, such as common stock and preferred stock.
Total equity is what is left over after you subtract the value of all the liabilities of a company from the
value of all of its assets. Equity is reported on a company's balance sheet. The formula to determine
equity is derived from the general accounting equation Assets = Liabilities + Equity. After performing the
appropriate algebraic operations, we get the following formula for equity:

# Equity= Assets- Liability

In case of Tandy’s Uber Service, total equity value is $28,350 comprised of common stock ($8,000) and
retained earnings ($20,350).

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 4. What it total revenue?

Total revenue equals the number of items of a good or service sold multiplied by the price of the
good or service. It is also referred to as the total sales. Total revenue on a profit-and-loss statement
summarizes company gross sales for the period, along with other types of income such as rent collected
on business property. This is an important number, because it provides the basis for calculating the
profits. Total revenue is not a balance sheet item and is reflected on the company income statement. So,
to calculate total revenue of Tandy’s Uber service at 2015, we need to look at its yearly income
statement period covered within 1st January to 31st December 2015.

5. What are total assets?

Total assets refer to the total amount of assets owned by a person or entity. Assets are items of
economic value, which are expended over time to yield a benefit for the owner. If the owner is a
business, these assets are usually recorded in the accounting records and appear in the balance sheet of
the business. Typical categories of assets can be categorized either as current asset or non-current asset.
Current assets are short-term economic resources that are expected to be converted into cash within
one year. Current assets include cash and cash equivalents, accounts receivable, inventory, and various
prepaid expenses. Again, non-current or fixed assets are long-term resources, such as plants,
equipment, and buildings. An adjustment for the aging of fixed assets is made based on periodic charges
called depreciation, which may or may not reflect the loss of earning powers for a fixed asset.

In case of Tandy’s Uber service, total asset value is $61,900 comprised of current asset ($23,900) and
non-current asset ($38,000). Current asset includes cash ($19,900), accounts receivable ($2,800) and
automobile supplies ($1,200). Again non-current asset includes automobiles valued at $38,000.

6. What is the balance (amount) of retained earnings?

Retained Earnings (RE) are the portion of a business’s profits that are not distributed as dividends to
shareholders but instead are reserved for reinvestment back into the business. Normally, these funds
are used for working capital and fixed asset purchases (capital expenditures) or allotted for paying off
debt obligations. Retained Earnings are reported on the balance sheet under the shareholder’s equity
section at the end of each accounting period. Retained earnings represent a useful link between the
income statement and the balance sheet, as they are recorded under shareholders’ equity which
connects the two statements. The purpose of retaining these earnings can be varied and includes buying

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new equipment and machines or other activities that could potentially generate growth for the
company.

In Case of Tandy’s Uber Service, total retained earnings are $20,350 which is available for new
investment, which is derived by subtracting total liabilities and common stock from total asset.

7. What are total liabilities?

Total liabilities are the combined debts and obligations that an individual or company owes to
outside parties. All assets of a company are either owned by the entity and classified as equity or are
subject to future obligations and recorded as a liability. On the balance sheet, total liabilities plus equity
must equal total assets. Total liabilities can be either short or long term. Short-term, or current
liabilities, are liabilities that are due within one year or less. They can include payroll expenses, rent, and
accounts payable (AP), money owed by a company to its customers. Long-term liabilities, or noncurrent
liabilities, are debts and other non-debt financial obligations with a maturity beyond one year. They can
include debentures, loans, deferred tax liabilities, and pension obligations.

In case of Tandy’s Uber Service, total liabilities is valued at $33,550 and is comprised of accounts payable
or current liabilities ($3,200) and notes payable or non-current liabilities ($30,350).

8. Can the company purchase an additional automobile for $20,000?

Whether a company can invest further in fixed asset or not mainly depends on retained earnings,
which is deducting all the liabilities and equity portion other than retained earnings from the total asset .
For Tandy’s Uber Service, total retained earnings are equal to $20,350. That means the company has
option to purchase an additional automobile for $20,000.