ACC 311 Lecture Notes - Lecture 11: Cash Flow, Financial Statement, Current Liability
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1. Produce a balance sheet for a company that distinguishesbetween current and non-current assets and liabilities.
2. Create a balance sheet from a trial balance.
3. Create a comparison of net income based on different methods ofinventory accounting.
4. Analyze a statement of cash flows and show where each line itemcan be found or calculated from the other financialstatements.
5. Prepare a full analysis of key financial ratios for a companyand state conclusions about the financial strength of the companycompared to industry ratios.
| Create a BalanceSheet from the trial balance: | ||||
| Debits | Credits | Classification | ||
| Cash | 300,000.00 | Current asset | ||
| Sales | (10,000,000.00) | Income statement | ||
| Cost of Goods Sold | 7,000,000.00 | Income statement | ||
| Selling Expenses | 500,000.00 | Income statement | ||
| Other income | (50,000.00) | Income statement | ||
| Administrative expenses | 350,000.00 | Income statement | ||
| Interest Expenses | 12,500.00 | Income statement | ||
| Land | 300,000.00 | non-current asset | ||
| Building | 2,000,000.00 | non-current asset | ||
| Long Term bond payable | (550,000.00) | non-current liability | ||
| Accrued Liabilities | (50,000.00) | current- liability | ||
| Accumulated Depreciation Buildings | (250,000.00) | non-current asset | ||
| Equipment | 750,000.00 | non-current asset | ||
| Receivables | 100,000.00 | current asset | ||
| Allowance for doubtful accounts | (7,500.00) | current asset | ||
| Accumulated depreciation equipment | (125,000.00) | non-current asset | ||
| Common Stock | (200,000.00) | equity | ||
| Payables | (115,000.00) | current Liability | ||
| Inventories | 200,000.00 | current asset | ||
| Prepaid Expenses | 50,000.00 | current asset | ||
| Retained Earnings | (215,000.00) | equity | ||
| 11,562,500.00 | (11,562,500.00) | |||
| Assets | Equity and Liabilities | |||||||||
| Current Assets | Current Liabilities | |||||||||
| Total Current Assets | - | Total Current Liabilities | - | |||||||
| Total long term Liabilities | - | |||||||||
| Total property plant and equipment | - | |||||||||
| Total Equity | - | |||||||||
| Total Assets | - | Total Equity and liabilities | - | |||||||
Consider the following balance sheet:
BestCare HMO
Balance Sheet
June 30, 2011
(in thousands)
Assets
Current Assets:
Cash $2,737
Net premiums receivable 821
Supplies 387
Total current assets $3,945
Net property and equipment $5,924
Total assets $9,869
Liabilities and Net Assets
Accounts payableâmedical
Services $2,145
Accrued expenses 929
Notes payable 382
Total current liabilities $3,456
Long-term debt $4,295
Total liabilities $7,751
Net assetsâunrestricted
(equity) $2,118
Total liabilities and net
Assets $9,869
Consider the following financial statements for Green Valley Nursing Home, Inc. a for profit long-term care facility:
Green Valley Nursing Home Inc.
Balance Sheet
December 31, 2011
Assets
Current assets:
Cash $105,737
Marketable securities 200,000
Net patient accounts receivables 215,600
Supplies 87,655
Total current assets $608,992
Property and equipment $2,250,000
Less accumulated depreciation 356,000
Net property and equipment $1,894,000
Total assets $2,502,992
Liabilities and Shareholder?s Equity
Current liabilities:
Accounts payable $72,250
Accrued expenses 192,900
Notes payable 100,000
Current portion of long-term debt 80,000
Total current liabilities $445,150
Long term debt $1,700,000
Shareholders? Equity:
Common stock, $10 par value $100,000
Retained earnings 257,842
Total shareholder?s equity $357,842
Total liabilities and shareholders? equity $2,502,992
A. WHAT IS THE PRIMARY DIFFERENCE BETWEEN THESE 2 STATEMENTS
| c. What was Green Valley's total debt ratio?************************************* | |
| Current liabilities | |
| LT liabilities | |
| Total liabilities (debt) | |
| Total assets | |
| Total debt ratio |
Produce a balance sheet for a company that distinguishes betweencurrent and non- current assets and liabilities.
Create a balance sheet from a trial balance.
Create a comparison of net income based on different methods ofinventory accounting.
Analyze a statement of cash flows and show where each line itemcan be found or
calculated from the other financial statements.
Prepare a full analysis of key financial ratios for a companyand state conclusions about
the financial strength of the company compared to industryratios.
PROJECT SUBMISSION PLAN
Project Part | Description/Requirements of Project Part | Evaluation Criteria |
1 | Title: Creating a Balance Sheet and Evaluating Inventory Task 1: Create a balance sheet from a trial balance for a givenscenario. Make sure you classify the accounts appropriately ascurrent or non-current. Click here to download the trialbalance. |
Page 1
AC1420: Project
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| Task 2: Perform inventory valuations using LIFO, FIFO, andweighted average methods based on the following information.Explain the impact of each method on the cost of goods sold andending inventory. The company imports microwaves from a supplier in China for theUS market. At the end of the first quarter, 100 microwaves are instock. The company purchased a total of 400 microwaves during thequarter at various prices: January: 100 units @ $75 February: 250 units @ $83
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