Half a Hot Dog on Your Balance Sheer

Suppose you have $20.00 in your packet. You go to the vendor at the airport and buy a hot dog for $5.00. We give him $20.00. He gives you a hot dog and $15.00 change. At this point you no longer have $20.00. The question is: are you richer, poorer, or exactly the same as you were a few minutes ago? Explain your answer.

Back to your hot dog, what do you think happens if you take a bite out of it? Is it still worth $5?

How do we handle this on the balance sheet?

How is this handled on the income statement? Explain your answer.

 

 

 

 

 

 

 

 

 

 

 

Sample Solution

ACED ESSAYS