COURSE 2 - The Balance Sheet The balance sheet (also called statement of financial position) reports the financial position of the business at a point in time. It does so by listing the categories and amounts of assets‚ liabilities and equity on a specific date‚ in a format that proves the fundamental accounting equation. ASSETS = EQUITY + LIABILITIES or ASSETS – LIABILITIES = EQUITY Formats of presentation Regardless of
Premium Balance sheet Generally Accepted Accounting Principles Asset
noncurrent liability and owners’ equity – that is‚ invested capital – accounts are affected by the transactions‚ but effects on assets (including cash) and current liabilities can be recorded in a single account‚”A&CL.” 20X0: The firm began as a partnership on January 10‚ with the equal partners‚ Able‚ Baker‚ and Cabot‚ each contributing $100‚000 capital. The accountant set up a capital account for each of the three partners. On April 1 the partners arranged with a bank a $100‚000‚ 8 percent‚ five-year ”balloon”
Premium Stock Preferred stock Dividend
A balance sheet‚ like a photo‚ provides a financial picture of a company on a given day and time. It categorizes all of a company’s resources as assets‚ all of its debts as liabilities‚ and all of the owner’s investments as equity. A company uses its assets‚ such as accounts receivable‚ inventory‚ and equipment‚ for manufacturing or purchasing products for sale or to provide a service. A company’s assets are financed by its liabilities (debt) and the owner’s equity (net worth). On a balance sheet
Premium Balance sheet Generally Accepted Accounting Principles Asset
risk‚ timing‚ and magnitude of all future cash flows‚ both short-term and long-term. If this is correct‚ then the statement is false. 3. Could a company’s cash flow to stockholders be negative in a given year? Explain how this might come about. If a company raises more money from selling stock than it pays in dividends in a particular period its cash flow to stockholders will be negative. If a company borrows more than it pays in interest‚ its cash flow to creditors will be negative. 4. Jetson
Premium Net present value Cash flow Asset
Example Company Balance Sheet December 31‚ 2011 ASSETS LIABILITIES Current Assets Current Liabilities Cash $ 2‚100 Notes Payable $ 5‚000 Petty Cash 100 Accounts Payable 35‚900 Temporary Investments 10‚000 Wages Payable 8‚500 Accounts Receivable - net 40‚500 Interest Payable 2‚900 Inventory 31‚000 Taxes Payable 6‚100 Supplies 3‚800 Warranty Liability 1‚100 Prepaid Insurance 1‚500 Unearned Revenues 1‚500 Total Current
Premium Balance sheet Generally Accepted Accounting Principles Asset
WHY PROFIT DOES NOT EQUAL CASH Why is profit not equal to cash coming in? Some differences such as loans received which do not impact the profit and loss statement are pretty obvious. Others may not be as obvious but you can break them down into three main areas: - Revenue is booked at sale. In many cases a sale is recorded for accounting purposes in the profit and loss statement when a company delivers a product or service. In many cases‚ no cash has been exchanged at the time of
Premium Depreciation Generally Accepted Accounting Principles Cash flow
CHAPTER 5 Balance Sheet and Statement of Cash Flows ASSIGNMENT CLASSIFICATION TABLE | | |Brief Exercises | | | | |Topics |Questions | |Exercises |Problems |Cases | |1. |Disclosure principles‚ uses of the |1‚ 2‚ 3‚ 4‚ 5‚ 6‚ 7‚|1 |
Premium Balance sheet Generally Accepted Accounting Principles
560 | Cash | 18‚750 | Retained Profits | 76‚000 | Salaries payable | 6‚750 | Supplies | 1‚040 | Salaries Expense | 19‚100 | Buildings | 85‚000 | Prepaid Rent | 15‚600 | Motor Vehicles | 96‚000 | Equipment | 250‚000 | Accumulated Depreciation – Motor Vehicles | 16‚000 | Accumulated Depreciation - Equipment | 51‚950 | Rent Expense | 6‚200 | Electricity Bill – paid on May 30‚ 2011 | 8‚500 | Land | 15‚000 | Depreciation Expense | 31‚750 | | | Required Prepare a fully
Premium Accounts receivable Generally Accepted Accounting Principles
Merck Consolidated Balance Sheet | | | | | | € million | ------------------------------------------------- Note | ------------------------------------------------- Dec. 31‚ 2012 | ------------------------------------------------- Dec. 31‚ 2011 | ------------------------------------------------- Jan. 1‚ 2011 | 1 | Previous year’s figures have been adjusted‚ see Note [5] | | Current assets | ------------------------------------------------- | -------------------------------------------------
Premium Balance sheet Asset Generally Accepted Accounting Principles
1. Q:Collect Balance Sheet of five different companies. Try to analyse it in your own words. Analysis can be in terms of change in profit‚ asset‚ liabilities. Etc ZYNGA [pic] The First comapny we’ll be looking at is Zynga. Let’s jump right into it. Across the board‚ the Total Current Assets is less than the previous year‚ more more than other earlier years. This could indicate that the company may have liquidized some of their assests within the year. Total Assests is greater than the
Premium Microsoft Balance sheet Asset