ACC 317 Module 7 Project 1
Module 7 Project Analysis
Southern New Hampshire University
ACC 317 – Intermediate Accounting
, Analysis
In preparing the financial statements for the company Lou’s Crew, a General Journal Entries,
Ledger Accounts Sheet, Income Statement, and Balance sheet was completed to examine their
financial health and performance. With only $20,000 in cash, most of their assets were tied up
in non-current assets (or long-term assets) like construction equipment, vehicles, long-term
investments and intangibles, leaving them with a total of $1,189,858.71 in total assets. Lou’s
Crew current financial stance shows on their income statement they made a loss of
$107,466.27. This subtracted from their retained earnings leaving them with $321,533.73 in
equity. Most of Lou’s Crew’s liabilities were also tied up in long-term liabilities with $7,525 in
current liabilities like interest payable, and $860,800 in long-term liabilities. Together, total
liabilities are $868,325. If the accounting equation presents Assets = Liabilities + Equity then
$1,189,858.73 assets = $868,325 liabilities + $321,533.73 equity. Both sides of the accounting
equation are equal to each other.
Property, Plant, and Equipment
Long-terms assets are non-current assets meaning they are not so easily liquidated or converted
to cash within a year. Property, plant, and equipment are a type of long-term assets that are
tangible and are utilized by a business in their daily operations. Long-term assets are important
to have the balance sheet to showcase a company’s investment in the future. These are physical
resources that a company needs to manufacture its products or deliver its services, responsible
for generating income.
PP&E (Property, Plant, and Equipment) undergo periodic depreciation to allocate the cost over
its useful life. Depreciation methods may vary but commonly include straight-line or declining
balance methods (What Is Property, Plant & Equipment?, 2024). When recording and
determining the cost of the asset, companies use what is called the historical acquisition cost.
This includes the purchase price, sales tax, and any necessary expenses such as installation fees
or delivery charges to bring the asset to a usable state (What Is Property, Plant & Equipment?,
2024). Companies use historical value instead of fair value due to the difficulty of subjectivity
and volatility in the market.
There are several methods available to calculate depreciation. GAAP (Generally Accepted
Accounting Principles) allow for four depreciation methods: unit of production depreciation,
Module 7 Project Analysis
Southern New Hampshire University
ACC 317 – Intermediate Accounting
, Analysis
In preparing the financial statements for the company Lou’s Crew, a General Journal Entries,
Ledger Accounts Sheet, Income Statement, and Balance sheet was completed to examine their
financial health and performance. With only $20,000 in cash, most of their assets were tied up
in non-current assets (or long-term assets) like construction equipment, vehicles, long-term
investments and intangibles, leaving them with a total of $1,189,858.71 in total assets. Lou’s
Crew current financial stance shows on their income statement they made a loss of
$107,466.27. This subtracted from their retained earnings leaving them with $321,533.73 in
equity. Most of Lou’s Crew’s liabilities were also tied up in long-term liabilities with $7,525 in
current liabilities like interest payable, and $860,800 in long-term liabilities. Together, total
liabilities are $868,325. If the accounting equation presents Assets = Liabilities + Equity then
$1,189,858.73 assets = $868,325 liabilities + $321,533.73 equity. Both sides of the accounting
equation are equal to each other.
Property, Plant, and Equipment
Long-terms assets are non-current assets meaning they are not so easily liquidated or converted
to cash within a year. Property, plant, and equipment are a type of long-term assets that are
tangible and are utilized by a business in their daily operations. Long-term assets are important
to have the balance sheet to showcase a company’s investment in the future. These are physical
resources that a company needs to manufacture its products or deliver its services, responsible
for generating income.
PP&E (Property, Plant, and Equipment) undergo periodic depreciation to allocate the cost over
its useful life. Depreciation methods may vary but commonly include straight-line or declining
balance methods (What Is Property, Plant & Equipment?, 2024). When recording and
determining the cost of the asset, companies use what is called the historical acquisition cost.
This includes the purchase price, sales tax, and any necessary expenses such as installation fees
or delivery charges to bring the asset to a usable state (What Is Property, Plant & Equipment?,
2024). Companies use historical value instead of fair value due to the difficulty of subjectivity
and volatility in the market.
There are several methods available to calculate depreciation. GAAP (Generally Accepted
Accounting Principles) allow for four depreciation methods: unit of production depreciation,
