REL 1000 Lecture Notes - Lecture 1: Cash Flow, International Accounting Standards Board, General Ledger

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1 Mar 2018

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Resources owned by a company (cash, land, and inventory) Current assets: cash, short term investments, accounts receivable, inventories, prepaid expenses, current assets current liabilities = measure of company"s working capital. Amounts owed to credits (rent, account payable, notes payable, and taxes) Stockholder"s equity: what"s left, the owner"s claim all the resources, what you owe, consist of common stock & retained earnings, (beg. Revenue: the amount a company gets for selling goods/services. Income statement: financial statement that reports the companies revenues and expenses over an interval of time, focuses on profitability and shows where the company was able to generate enough revenue to cover the expense of running the business. Common stock: anytime a corporation issues stock in exchange for cash. Retained earnings: cumulative net income over the life of the company less dividends, to find beginning it"s ending net income + dividends, beg+net-div=retained. Financial statements: income statements, retained earnings statement, balance sheet, and statement of cash flow.

Related Questions

what is the operating efficiency of the firm using the below data

As Reported Annual Balance Sheet
Report Date	12/31/2013	01/01/2013
Currency	USD	USD
Audit Status	Not Qualified	Not Qualified
Consolidated	Yes	Yes
Cash & cash equivalents	32386000	31486000
Restricted cash	-	205000
Receivables, gross	14401000	11430000
Less: allowance for doubtful accounts	291000	103000
Receivables, net	14110000	11327000
Inventories	2670000	3143000
Prepaid & refundable income taxes	483000	655000
Prepaid rent	307000	3080000
Prepaid expenses & other current assets	6727000	1681000
Total current assets	$56,683,000.00	51577000
Leasehold improvements	49532000	50358000
Furniture, fixtures & equipment	57529000	57457000
Construction in progress (primarily stores under construction)	164000	79000
Property, fixtures & equipment, gross	107225000	107895000
Less accumulated depreciation & amortization	69740000	69452000
Property, fixtures & equipment, net	37485000	38442000
Goodwill	1233000	1336000
Trademarks & other intangible assets, net	1317000	1412000
Notes receivable	300000	-
Deposits & other long-term assets	898000	846000
Total other long-term assets	1198000	846000
Total assets	97916000	93613000
Accounts payable	5086000	8206000
Accrued compensation & benefits	5538000	7566000
Workers' compensation & health insurance reserves	1046000	1087000
Accrued jambacard liability	37121000	33634000
Other current liabilities	13082000	9728000
Total current liabilities	$61,873,000.00	60221000
Deferred rent	4033000	5610000
Deferred revenue	2598000	2292000
Construction allowance	1359000	2382000
Contingent consideration	553000	894000
Other liabilities	658000	702000
Deferred rent & other long-term liabilities	9201000	11880000
Total liabilities	71074000	72101000
Series B redeemable preferred stock	-	7916000
Common stock	17000	78000
Additional paid-in capital	391234000	380007000
Retained earnings (accumulated deficit)	-364409000	-3.66E+08
Total stockholders' equity	26842000	13596000

Currency	USD	USD
Audit Status	Not Qualified	Not Qualified
Consolidated	Yes	Yes
Net income (loss)	2080000	302000
Depreciation & amortization	10974000	11062000
Impairment of long-lived assets	728000	711000
Lease termination, store closure costs & disposals	-3308000	820000
Loss (gain) from sale of investment in joint venture	-	-545000
Contingent consideration fair value measurement	-651000	-57000
Jambacard breakage income & amortization, net	-3177000	-4275000
Share-based compensation	2550000	2091000
Bad debt & purchase obligation reserves	-	600000
Bad debt, purchase obligation reserves & trade credits	645000	-
Deferred rent	-1186000	-1138000
Equity loss (income) from joint ventures	-	-70000
Receivables	-2998000	1637000
Inventories	-157000	-1348000
Prepaid & refundable taxes	172000	-319000
Prepaid rent	2773000	-81000
Prepaid expenses & other current assets	-2842000	-172000
Other long-term assets	243000	-215000
Restricted cash from operating activities	205000	1147000
Accounts payable	-2809000	3115000
Accrued compensation & benefits	-2028000	1000000
Workers' compensation & health insurance reserves	-41000	-5000
Accrued jambacard liability	6664000	4653000
Other current liabilities	2387000	-517000
Other long-term liabilities	246000	-828000
Net cash flows from operating activities	10470000	17568000
Capital expenditures	-1.5E+07	-5249000
Business acquisition	-	-390000
Purchase of investment	-300000	-
Proceeds from the sale of stores	4777000	4000
Proceeds from sale of investment in joint venture	-	1032000
Capital distributions from investment, net	-	105000
Net cash flows from investing activities	-1E+07	-4498000
Proceeds pursuant to stock plans	822000	98000
Redeemable preferred stock dividends paid	-158000	-1289000
Net cash flows from financing activities	664000	-1191000
Net increase (decrease) in cash & equivalents	900000	11879000
Cash & equivalents at beginning of period	31486000	19607000
Cash & equivalents at end of period	32386000	31486000
Cash paid for interest	51000	168000
Income taxes paid	187000	277000

Report Date	12/31/2013	01/01/2013
Currency	USD	USD
Audit Status	Not Qualified	Not Qualified
Consolidated	Yes	Yes
Company stores	2.13E+08	2.15E+08
Franchise & other revenue	16362000	13664000
Total revenue	2.29E+08	2.29E+08
Cost of sales	52211000	50215000
Labor costs	62015000	63086000
Occupancy costs	29350000	29473000
Store operating expense	34986000	33612000
Depreciation & amortization	10974000	11062000
General & administrative expense	37771000	40771000
Store pre-opening expense	880000	604000
Impairment of long-lived assets	728000	711000
Store lease termination & closure	148000	421000
Other operating expense (income), net	-2182000	-1779000
Total costs & operating expenses	2.27E+08	2.28E+08
Income (loss) from operations	2368000	613000
Interest income	9000	61000
Interest expense	242000	217000
Total other income (expense), net	-233000	-156000
Income (loss) before income taxes	2135000	457000
Current federal income taxes	-79000	81000
Current state income taxes	27000	10000
Current foreign income taxes	107000	64000
Total current income taxes	55000	155000
Income tax expense (benefit)	55000	155000
Net income (loss)	2080000	302000
Redeemable preferred stock dividends & deemed dividends	588000	2181000
Net income (loss) attributable to common stockholders	1492000	-1879000
Weighted average shares outstanding - basic	16793235	14139888
Weighted average shares outstanding - diluted	17222030	14139888
Year end shares outstanding	17154655	15481782
Net income (loss) per share - basic	0.09	-0.15
Net income (loss) per share - diluted	0.09	-0.15
Total number of employees	4000	4300
Number of common stockholders	91	102

azureweasel117

NEED ASAP PLEASE

Question 1

Which one of the following is not an externaluser of accounting information?

		Customers
		Investors
		Regulatory agencies
		All of these are external users

3 points

Question 2

The first step in solving an ethical dilemma is to

		identify and analyze the principal elements in thesituation.
		identify the alternatives.
		recognize an ethical situation and the ethical issuesinvolved.
		weigh the impact of each alternative on variousstakeholders.

3 points

Question 3

Generally accepted accounting principles are

		income tax regulations of the Internal Revenue Service.
		standards that indicate how to report economic events.
		theories that are based on physical laws of the universe.
		principles that have been proven correct by academicresearchers.

3 points

Question 4

Which of the following events is not a businesstransaction?

		Issuance of stock in exchange for cash.
		Hired employees.
		Incurred utility expenses for the month.
		Earned revenue for services provided.

3 points

Question 5

When assets are distributed to the owners of a corporation,these distributions are termed

		depletions.
		consumptions.
		dividends.
		a credit line.

3 points

Question 6

If total liabilities increased by $8,000, then

		assets must have decreased by $8,000.
		stockholders' equity must have increased by $8,000.
		assets must have increased by $8,000, or stockholders' equitymust have decreased by $8,000.
		assets and stockholders' equity each increased by $4,000.

3 points

Question 7

If total liabilities increased by $30,000 and stockholders'equity increased by $20,000 during a period of time, then totalassets must change by what amount and direction during that sameperiod?

		$50,000 decrease
		$10,000 decrease
		$10,000 increase
		$50,000 increase

3 points

Question 8

Misra Company compiled the following financial information as ofDecember 31:

Revenues	$ 340,000
Retained Earnings, Beginning	$ 60,000
Equipment	$ 80,000
Expenses	$ 250,000
Cash	$ 90,000
Dividends	$ 20,000
Supplies	$ 10,000
Accounts payable	$ 40,000
Accounts receivable	$ 70,000
Common Stock	$ 80,000

Misra's assets on December 31 are

		$180,000.
		$250,000.
		$360,000.
		$ 490,000.

3 points

Question 9

Mofro's Computer Repair Shop started the year with total assetsof $300,000 and total liabilities of $200,000. During the year, thebusiness recorded $500,000 in computer repair revenues, $300,000 inexpenses, and Mofro paid dividends of $50,000. Stockholders' equityat the end of the year was

		$200,000.
		$100,000.
		$250,000.
		$300,000.

3 points

Question 10

A balance sheet shows

		assets, liabilities, and stockholders' equity.
		expenses, dividends, and stockholders' equity.
		revenues, expenses, and dividends.
		revenues, liabilities, and stockholders' equity.

3 points

Question 11

At September 1, Foli Co. reported retained earnings of $136,000.During the month, Foli generated revenues of $20,000, incurredexpenses of $12,000, purchased equipment for $5,000 and paiddividends of $2,000. What is the amount of retained earnings atSeptember 30?

		$136,000
		$142,000
		$8,000
		$137,000

3 points

Question 12

Grayton Industries purchased supplies for $1,000. The Companypaid $500 in cash and agreed to pay the balance in 30 days. Thejournal entry to record this transaction would include a debit toan asset account for $1,000, a credit to a liability account for$500. Which of the following would be the correct way to completethe recording of the transaction?

		Credit an asset account for $500.
		Credit the Retained Earnings account for $500.
		Credit another liability account for $500.
		Debit the Retained Earnings account for $500.

3 points

Question 13

Radio Moscow Industries purchased supplies for $1,000. They paid$400 in cash and agreed to pay the balance in 30 days. The journalentry to record this transaction would include a debit to an assetaccount for $1,000, a credit to a liability account for $600. Whichof the following would be the correct way to complete the recordingof the transaction?

		Credit an asset account for $400.
		Credit another liability account for $400.
		Credit the retained earnings account for $400.
		Debit the retained earnings account for $400.

3 points

Question 14

A credit to a liability account

		must be accompanied by a debit to an asset account.
		indicates an increase in the amount owed to creditors.
		is an error.
		indicates a decrease in the amount owed to creditors.

3 points

Question 15

In recording business transactions, evidence that an accountingtransaction has taken place is obtained from

		business documents.
		the Internal Revenue Service.
		the public relations department.
		the SEC.

3 points

Question 16

On June 1, Leno Inc. buys a copier machine for her business andfinances this purchase with cash and a note. When journalizing thistransaction, the company's accountant will

		make a simple entry.
		use two journal entries.
		make a compound entry.
		list the credit entries first, which is proper form for thistype of transaction.

3 points

Question 17

A three column form of account is so named because it hascolumns for

		debit, credit, and balance.
		debit, credit, and date.
		debit, credit, and account name.
		debit, credit, and reference.

3 points

Question 18

The first step in designing a computerized accounting system isthe creation of the

		general ledger.
		general journal.
		trial balance.
		chart of accounts.

3 points

Question 19

Chik Chik Company showed the following balances at the end ofits first year:

Cash	$ 6,000
Prepaid insurance	$ 9,400
Accounts receivable	$ 7,000
Accounts payable	$ 5,600
Notes payable	$ 8,400
Common stock	$ 2,800
Dividends	$ 1,400
Revenues	$ 44,000
Expenses	$ 35,000

What did Chik Chik Company show as total credits on its trialbalance?

		$51,400
		$60,800
		$62,200
		$70,200

3 points

Question 20

Which of the following time periods would notbe referred to as an interim period?

		Monthly
		Quarterly
		Semi-annually
		Annually

1. Which statement is normally prepared first? (Points : 3) Income statement Balance sheet Statement of cash flows Retained earnings statement2. When a business borrows money, it incurs a(n) (Points : 3) tax. liability. cash payment. all of these.3. More than 70% of businesses are organized as what type of business? (Points : 3) Not-for-profit Corporation Partnership Sole proprietorship4. Brennan, Inc. had revenues of $234,000, expenses of $175,000, and dividends of $40,000 during 2009. Which of the following statements is correct? (Points : 3) Net income for 2009 totaled $19,000. Net income for 2009 totaled $59,000. Total retained earnings increased by $59,000 during 2009. Total retained earnings decreased by $40,000 during 2009.5. The statement of cash flows is integrated with the balance sheet because (Points : 3) the cash at the beginning of the period plus or minus the cash flows from operating, investing, and financing activities equals the end of period cash reported on the balance sheet. the cash at the beginning of the period plus or minus the net income equals the end of period cash reported on the balance sheet. the cash at the beginning of the period plus or minus assets and liabilities equals the end of period cash reported on the balance sheet. the cash at the beginning of the period plus or minus the cash flows from operating activities equals the end of period cash reported on the balance sheet.6. The basic financial statements do NOT include the (Points : 3) income statement. tax return balance sheet. statement of cash flows.7. A __________ is an economic event that under generally accepted accounting principles affects an element of the financial statements and must be recorded. (Points : 3) framework control set of rules transaction8. The payment of a liability (Points : 3) decreases assets and stockholders' equity. increases assets and decreases liabilities. decreases assets and increases liabilities. decreases assets and decreases liabilities. 9. Co. received $1,000 from Newbie as rent for the use of a building owned by UNI. How does this transaction affect UNI's accounts if UNI recognizes a liability? (Points : 3) Cash is increased and revenue is increased. Cash is increased and revenue is decreased. Cash is increased and unearned revenue is increased. It is not recorded.10. Depreciation Expense and Accumulated Depreciation are classified, respectively, as (Points : 3) expense and contra asset. asset and contra liability. revenue and asset. contra asset and expense.11. Deferred expenses (prepaid expenses) are items initially recorded as assets but are expected to become __________ over time. (Points : 3) Liabilities Assets stockholders%u2019 equity Expenses12. A&M Co. provided services of $1,000,000 to clients on account. How does this transaction affect A&M%u2019s accounts? (Points : 3) Increase accounts receivable and cash by $1,000,000 each Increase accounts receivable and revenues by $1,000,000 each Increase accounts receivable and unearned revenues by $1,000,000 each No effect at this time13. Multiple-step income statements show: (Points : 3) gross profit but not income from operations. neither gross profit nor income from operations. both gross profit and income from operations. income from operations but not gross profit.14. Since merchandise inventory is normally sold within a year, how is it reported on the balance sheet? (Points : 3) As a revenue As the cost of merchandise sold It does not appear on the Balance Sheet As a current asset15. The credit terms of a sale are normally indicated on a(n) (Points : 3) purchase order. invoice. bill of lading. account receivable.16. Inventory shortage is recorded when (Points : 3) merchandise is returned by a buyer. merchandise purchased from a seller is incomplete or short. merchandise is returned to a seller. there is a difference between a physical count of inventory and inventory records. 17. The bank reconciliation (Points : 3) should be prepared by an employee who records cash transactions. is part of the internal control system. is for information purposes only. is sent to the bank for verification.18. A special cash fund used to make small payments that occur frequently is called a(n) (Points : 3) operating expenses fund. change fund. market fund. petty cash fund.19. The objectives of internal control are to (Points : 3) control the internal organization of the accounting department personnel and equipment. provide reasonable assurance that assets are safeguarded, information is processed accurately, and laws and regulations are complied with. prevent fraud and promote the social interest of the company. provide control over %u201Cinternal-use only%u201D reports and employee internal conduct.20. When a firm uses internal auditors, it is adhering to which of the following internal control elements? (Points : 3) Risk assessment Proofs and security measures Monitoring Separating responsibilities for related operations21. What type of account is Allowance for Doubtful Accounts? (Points : 3) Contra asset Asset Revenue Expense22. Merchandise inventory is reported on the balance sheet in the section entitled (Points : 3) current assets. fixed assets. current liabilities. stockholders' equity.23. Receivables are usually a significant portion of (Points : 3) total current liabilities. total liabilities. total current assets. total assets.24. The inventory data for an item for November are: Nov.1 Inventory 25 units at $20 10 Purchased 30 units at $21 30 Purchased 10 units at $22 Sold 35 unitsUsing the first-in, first-out method, what is the cost of the merchandise inventory of 30 units on November 30? (Points : 3) $640 $605 $623 $66025. All amounts paid to get an asset in place and ready for use are referred to as (Points : 3) capital expenditures. revenue expenditures. residual value. cost of an asset.26. Fixed assets are ordinarily presented in the balance sheet (Points : 3) at current market values. at replacement costs. at cost less accumulated depreciation. in a separate section along with intangible assets.27. Goodwill is (Points : 3) amortized similar to other intangibles. only written down if an impairment in value occurs. charged to expense immediately. amortized over 40 years or its economic life, whichever is shorter.28. If a capital expenditure is treated as a revenue expenditure, then (Points : 3) expenses are overstated and owners' equity is understated. expenses are overstated and assets are overstated. expenses are understated and owners' equity is overstated. net income is overstated and owners' equity is understated.29. A bond indenture is (Points : 3) a contract between the corporation issuing the bonds and the underwriters selling the bonds. the amount due at the maturity date of the bonds. a contract between the corporation issuing the bonds and the bondholders. the amount for which the corporation can buy back the bonds prior to the maturity date.30. Gross earnings for a payroll period less payroll deductions are referred to as (Points : 3) overtime pay. bonus pay. gross pay. net pay.31. How is treasury stock shown on the balance sheet? (Points : 3) As an asset As a decrease in stockholders' equity As an increase in stockholders' equity Treasury stock is not shown on the balance sheet.32. Current liabilities are (Points : 3) due but not receivable for more than one year. due but not payable for more than one year. due and receivable within one year. due and payable within one year.33. The total earnings of an employee for a payroll period are referred to as (Points : 3) take-home pay. pay net of taxes. net pay. gross pay.34. Where is interest expense listed on the income statement? (Points : 3) Other expense section Cost of merchandise sold Operating expenses Interest expense is on the balance sheet, not the income statement.35. A corporation has 50,000 shares of $100 par value stock outstanding. If the corporation issues a 4-for-1 stock split, the number of shares outstanding after the split will be (Points : 3) 200,000 shares. 50,000 shares. 250,000 shares. 12,500 shares.

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REL 1000 Lecture Notes - Lecture 1: Cash Flow, International Accounting Standards Board, General Ledger

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