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CHAPTER 8 MASTERING YOUR MONEY
LIABILITIES $
2008
Current Liabilities:
Short-term Loan (overdraft) 20,000
Accounts payables 40,000
Payrolls 16,000
Total current liabilities 76,000
Long Term liabilities: 100,000
Bank Loan 100,000
Total Long Term Liabilities
$176,000
Total Liabilities
100,000
SHAREHOLDER’S EQUITY 77,000
Paid up capital $177,000
Retained earnings
Total Shareholder’s equity
Total Liabilities + Shareholder’s Equity $353,000
* Note that Assets are divided into current assets and
long term (non-current) assets. Current assets are
expected to be converted into cash, sold or to be
consumed within a year. Long-term assets are meant
to be held over many years and are not expected to
be disposed within a year.
Current liabilities are debts owed by the company that
is due to be paid back within a year. Long Term Liabilities
are only due to be repaid after one year.
SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES 251
