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ACCT 2000 Chapter Notes - Chapter 2-9.3.14: Retained Earnings, Financial Statement, Accounting

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tealbutterfly708
10 Dec 2014
School
LSU
Department
Accounting
Course
ACCT 2000
Professor
L O W E- A R D O I N

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Document Summary

Identify the sections of a classified balance sheet. Identify and compute ratios for analyzing a company"s profitability: explain the relationship between a retained earnings statement and a statement of stockholders" equity. Identify and compute ratios for analyzing a company"s liquidity and solvency using a balance sheet: use the statement of cash flows to evaluate solvency, explain the meaning of generally accepted accounting principles, discuss financial reporting concepts. The classified balance sheet: reports the assets, liabilities, and equity at a, groups specific point in time. Snapshot liabilities, using standard classifications together similar assets and similar. Common stock (investment by shareholder) retained earnings. Start with cash, go through, get back to cash: for most businesses, the cycle is less than a year so, current assets a one-year cutoff is used. to cash (liquidity). are listed in the order in which convert. Example: tiger company has the following assets at 12/31/14.

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Related Questions

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 -

Problem 12-12A Prepare a Statement of Cash Flows [LO12-1, LO12-2] A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Balance Beginning Balance Assets Current assets: Cash and cash equivalents $ 66 $ 135 Accounts receivable 910 831 Inventory 785 718 Total current assets 1,761 1,684 Property, plant, and equipment 1,775 1,727 Less accumulated depreciation 932 732 Net property,plant, and equipment 843 995 Total assets $ 2,604 $ 2,679 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 314 $ 187 Accrued liabilities 207 143 Income taxes payable 131 99 Total current liabilities 652 429 Bonds payable 550 870 Total liabilities 1,202 1,299 Stockholders' equity: Common stock 280 280 Retained earnings 1,122 1,100 Total stockholders' equity 1,402 1,380 Total liabilities and stockholders' equity $ 2,604 $ 2,679 Burgess Company Income Statement (dollars in millions) Sales $ 4,510 Cost of goods sold 3,080 Gross margin 1,430 Selling and administrative expenses 934 Net operating income 496 Nonoperating items: Gain on sale of equipment 2 Income before taxes 498 Income taxes 166 Net income $ 332 Burgess also provided the following information: 1. The company sold equipment that had an original cost of $66 million and accumulated depreciation of $34 million. The cash proceeds from the sale were $34 million. The gain on the sale was $2 million. 2. The company did not issue any new bonds during the year. 3. The company paid a cash dividend during the year. 4. The company did not complete any common stock transactions during the year. Required: 1. Using the indirect method, prepare a statement of cash flows for the year. (Enter your answers in millions not in dollars . List any deduction in cash and cash outflows as negative amounts.)

PROBLEM 14-12 Prepare a statement of Cash Flows (L014-1, L014-2] A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Balance Beginning Balance $ 79 580 5 $ 49 645 660 1,354 1,515 765 750 $2,104 466 1 $2,099 Assets Current assets: Cash and cash equivalents ... Accounts receivable Inventory Total current assets ........... Property, plant, and equipment. Less accumulated depreciation .. Net property, plant, and equipment.... Total assets ..... Liabilities and Stockholders' Equity Current liabilities: Accounts payable ... Accrued liabilities ........... Income taxes payable ......... Total current liabilities. Bonds payable............ Total liabilities ............ Stockholders' equity: Common stock Retained earnings ... Total stockholders' equity ........... Total liabilities and stockholders' equity ..... $ 250 $ 155 165 151 010 161 161 1,089 $2,099 Burgess Company Income Statement (dollars in millions) Net sales ....... Cost of goods sold ...... Gross margin Selling and administrative expenses ...... Net operating income ... Nonoperating items: Gain on sale of equipment .... Income before taxes... Income taxes ........................... Net income ................................ $3,600 2,550 1,050 875 175 115 Burgess also provided the following information: 1. The company sold equipment that had an original cost of $13 million and accumulated depre- ciation of $8 million. The cash proceeds from the sale were $8 million. The gain on the sale was $3 million 2. The company did not issue any new bonds during the year. 3. The company paid a cash dividend during the year. 4. The company did not complete any common stock transactions during the year. Required: 1. Using the indirect method, prepare a statement of cash flows for the year. 2. Assume that Burgess had sales of $3,800, net income of $135, and net cash provided by oper ating activities of $150 in the prior year (all numbers are stated in millions). Prepare a memo that summarizes your interpretations of Burgess's financial performance.