Introduction to financial statements 06052013

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Introduction to financial statements 06052013

  1. 1. 5 June 2013
  2. 2.  Statement of Comprehensive Income(Income Statement) Statement of Changes in Equity Statement of Financial Position (BalanceSheet) Statement of Cash Flows Notes to Financial Statements
  3. 3.  Reports the revenue and expenses for aspecific period of time Revenue is listed first, followed by expenses Investment and withdrawal transactionsbetween the owner and the business are notincluded in the measurement of profit
  4. 4.  Reports the changes in owner’s equity for aspecific period of time Beginning owner’s equity, owner’sinvestments, profit (loss) and owner’sdrawings Information in this statement indicates thereasons why owner’s equity has increased ordecreased during the period.
  5. 5.  Reports the assets, liabilities and owner’sequity at a specific date Total assets must equal total liabilities plusowner’s equity A snapshot of the business’s financialcondition at a specific moment in time
  6. 6.  Provides information on the cash receipts andpayments for a specific period of time Operating activities, investing activities,financing activities
  7. 7.  Additional information provided in acompany’s financial statements. Notes to the financial statements report thedetails and additional information that areleft out of the main reporting documents.
  8. 8.  Report Form – assets are listed aboveliabilities and owner’s equity Account Form – the assets section is placed onthe left and the liabilities and owner’s equitysections on the right
  9. 9. Current AssetsCash P 65,189.00Trade and Other Receivables 171,120.00Merchandise Inventory 75,150.00Prepaid Expenses 15,815.00Total Current Assets P 327,274.00Non-current AssetsProperty, Plant and Equipment 151,920.00TOTAL ASSETS P 479,194.00Current LiabilitiesTrade and Other Payables P 177,206.00Non-current LiabilitiesMortgage Payable 120,000.00Total Liabilities 297,206.00Owners EquityCora, Capital 181,988.00TOTAL LIABILITIES AND OWNERS EQUITY P 479,194.00RYE CO.Statement of Financial Positionas at December 31, 2012AssetsLiabilities and owners equity
  10. 10. Current Assets Current LiabilitiesCash P 65,189.00 Trade and Other Payables P 177,206.00Trade and Other Receivables 171,120.00Merchandise Inventory 75,150.00 Non-current LiabilitiesPrepaid Expenses 15,815.00 Mortgage Payable 120,000.00Total Current Assets P 327,274.00Total Liabilities 297,206.00Non-current Assets Owners EquityProperty, Plant and Equipment 151,920.00 Cora, Capital 181,988.00TOTAL ASSETS P 479,194.00 TOTAL LIABILITIES AND OWNERS EQUITY P 479,194.00Assets Liabilities and owners equityRYE CO.Statement of Financial Positionas at December 31, 2012
  11. 11.  Natural Form – one where expenses areclassified according to the nature of expense Functional form – one where expenses areclassified according to the function ofexpense
  12. 12. IncomeService Income 50,800.00Interest Income 5,000.00Rent Income 12,000.00Total Revenue 67,800.00ExpensesSupplies Expense 5,000.00Salaries Expense 4,600.00Utilities Expense 7,820.00Depreciation Expense 3,280.00Interest Expense 400.00Total Expense 21,100.00Profit 46,700.00KYE CO.Income StatementFor the period December 31, 20X9
  13. 13. Net Sales 645,845.00Less: Cost of Goods Sold 458,882.00Gross Profit 186,963.00Add: Other Income 2,122.00Less: Other ExpensesDistribution Costs 20,725.00General and Administrative Costs 95,494.00Finance Costs 5,485.00Net Income (Loss) 67,381.00RYE CO.Income StatementFor the period December 31, 20X9
  14. 14. OWNER’SEQUITYINCREASES DECREASESInvestments byOwnerRevenueWithdrawals byOwnerExpenses
  15. 15. Cora, Capital - beginning 120,007.00Add: Net Income 67,381.00Less: Cora, Drawing 5,400.00Cora, Capital - end 181,988.00RYE CO.Statement of Changes in Owners EquityFor the period December 31, 20X9

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