Here are the solutions to the selected problems from Chapter 17:
P17-7A:
Accounts receivable, December 31, 2009 $90,000
Estimated uncollectible accounts (3% of receivables) 2,700
Net accounts receivable $87,300
Accounts receivable, December 31, 2010 $110,000
Estimated uncollectible accounts (5% of receivables) 5,500
Net accounts receivable $104,500
Increase in estimated uncollectible accounts $3,200
P17-9A:
Accounts receivable, January 1 $80,000
Credit sales for January 30,000
Collections for January (25,000)
This ppt defines business finance, become
familiar with the role of business finance and knowing the important consideration of risks in financial decision making.
Know the relationship of business finance in other disciplines particularly accounting.
This ppt defines business finance, become
familiar with the role of business finance and knowing the important consideration of risks in financial decision making.
Know the relationship of business finance in other disciplines particularly accounting.
The Cash Flow Statement translates earnings in the Income Statement into cash inflows. Explained in detail above as a part of the topic “Financial accounting”, is brought to you by Welingkar’s Distance Learning Division.
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Accounting - Lesson 3 : The Business Transactions Elearningpower
This Video online accounting course is
designed for those with little or no
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review their basic knowledge of accounting.
Fundamentals of abm2 statement of comprehensive income abm specialized subjectGian Paulo Rabanal, LPT
Fundamentals of ABM2
based on the book Fundamentals of ABM 2 by D. R. C. Salazar, CPA
Learning Competencies Covered:
ABM_FABM12-Ic-d5
ABM_FABM12-Ic-d6
ABM_FABM12-Ic-d7
This presentation aims:
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– To appreciate that the presentation of the Statement of Changes in Equity is dependent on the form of business organization
– To identify the elements of the Statement of Changes in Equity
– To determine the nature of the different equity accounts used by corporations
– To prepare a Statement of Changes in Equity
The Cash Flow Statement translates earnings in the Income Statement into cash inflows. Explained in detail above as a part of the topic “Financial accounting”, is brought to you by Welingkar’s Distance Learning Division.
For more such innovative content on management studies, join WeSchool PGDM-DLP Program: http://bit.ly/SlideshareFaccounting
Join us on Facebook: http://www.facebook.com/welearnindia
Follow us on Twitter: https://twitter.com/WeLearnIndia
Read our latest blog at: http://welearnindia.wordpress.com
Subscribe to our Slideshare Channel: http://www.slideshare.net/welingkarDLP
Accounting - Lesson 3 : The Business Transactions Elearningpower
This Video online accounting course is
designed for those with little or no
experience in bookkeeping or accounting
and may be of interest to those looking to
review their basic knowledge of accounting.
Fundamentals of abm2 statement of comprehensive income abm specialized subjectGian Paulo Rabanal, LPT
Fundamentals of ABM2
based on the book Fundamentals of ABM 2 by D. R. C. Salazar, CPA
Learning Competencies Covered:
ABM_FABM12-Ic-d5
ABM_FABM12-Ic-d6
ABM_FABM12-Ic-d7
This presentation aims:
– To understand the purpose of the Statement of Changes in Equity
– To appreciate that the presentation of the Statement of Changes in Equity is dependent on the form of business organization
– To identify the elements of the Statement of Changes in Equity
– To determine the nature of the different equity accounts used by corporations
– To prepare a Statement of Changes in Equity
Financial Statament s and analysis.
It is also important in accounting , Financial Statament s and analysis.
It is also important in accounting Financial Statament s and analysis.
It is also important in accounting Financial Statament s and analysis.
It is also important in accounting Financial Statament s and analysis.
It is also important in accounting
Finance for Managers
(Managerial Accounting)
Role of Financial Information
• Financial information pervades our economy
– It is the primary means of communication between profit seeking
organizations and their stakeholders
– For this reason organizations use financial measures internally as a broad indicator of performance
• This financial information provides a signal that something is wrong, but not what is wrong
• Financial information summarizes underlying activities
– But to explain financial results, managers need to dig deeper
– Detailed information provides additional insight into what is happening to
profits
CFO Insight For Business Owners: How to Utilize Financial StatementsChase R. Morrison
CFO Insight: This is a primer on how to use financial statements to more effectively operate a privately held business and was used to educate new entrepreneurs at the Valley Economic Development Corporation in Sherman Oaks, CA.
"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
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"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
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Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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[Note: This is a partial preview. To download this presentation, visit:
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Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
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Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Recruiting in the Digital Age: A Social Media MasterclassLuanWise
In this masterclass, presented at the Global HR Summit on 5th June 2024, Luan Wise explored the essential features of social media platforms that support talent acquisition, including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
2. Primary Financial Statements
Basic Financial Statements:
Balance Sheet
Income Statement
Statement of Retained
Earnings
Statement of Cash Flows
Supplementary Statements:
Cost of Goods Manufactured
Cost of Goods Sold
3. Primary Financial Statements
• Primary financial statements answer
basic questions including:
– What is the company’s current financial
status?
– What was the company’s operating results
for the period?
– How did the company obtain and use cash
during the period?
4. • Summary of the financial position of a company
at a particular date
• Assets: cash, accounts receivable, inventory,
land, buildings, equipment and intangible items
• Liabilities: accounts payable, notes payable and
mortgages payable
• Owners’ Equity: net assets after all obligations
have been satisfied
The Balance Sheet
5. The Balance Sheet
• What are the resources of the company?
• What are the company’s existing obligations?
• What are the company’s net assets?
6. Accounting Equation
Assets = Liabilities + Owners’ Equity
Sources of Funding
Creditors’
claims
against
resources
= +
Owners’
claims
against
resources
Resources
Resources
to use to
generate
revenues
7. Assets
Cash $ 40
Accounts receivable 100
Land 200
Total assets $340
Liabilities
Accounts payable $ 50
Notes payable 150
$200
Owners’ Equity
Capital stock $100
Retained earnings 40
$140
Total liabilities
and owners’ equity $340
Sample Balance Sheet
Must
Equal
8. Classified and Comparative
Balance Sheets
• They distinguish between:
– Current and long-term assets
– Current and long-term liabilities
• Classified balance sheet is listed in
decreasing order of liquidity
• Comparative so financial statement users
can identify significant changes over
time. They have more than one year on
the Balance Sheet.
9. Balance Sheet Limitations
Assets recorded at historical value
Only recognizes assets that can be
expressed in monetary terms
Owners’ equity is usually less than the
company’s market value
10. The Income Statement
• Shows the results of a company’s operations
over a period of time.
• What goods were sold or services performed
that provided revenue for the company?
• What costs were incurred in normal operations
to generate these revenues?
• What are the earnings or company profit?
11. The Income Statement
Revenues
• Assets (cash or AR) created through business
operations
Expenses
• Assets (cash or AP) consumed through business
operations
Net Income or (Net Loss)
• Revenues - Expenses
McGraw-Hill/Irwin, 2003
12. The Example Company
Income Statement
For the Years Ended December 31, 2010 and 2011
2011 2010
Revenues:
Sales $100 $ 85
Other revenue 30 15
Total revenues $130 $100
Expenses:
Cost of goods sold $ 62 $ 58
Operating & admin. 16 12
Income tax 20 18
Total expenses $ 98 $ 88
Net Income $ 32 $ 12
13. An additional
financial statement
that identifies changes
in retained earnings
from one accounting
period to the next.
Statement of Retained Earnings
Beginning retained earnings
+ Net income
– Dividends paid
= Ending retained earnings
Net income results in:
Increase in net assets
Increase in retained earnings
Increase in owners’ equity
Dividends result in:
Decrease in net assets
Decrease in retained earnings
Decrease in owners’ equity
14. Statement of Cash Flows
• Reports the amount of cash collected and paid
out by a company in operating, investing and
financing activities for a period of time.
• How did the company receive cash?
• How did the company use its cash?
• Complementary to the income statement.
• Indicates ability of a company to generate
income in the future.
15. Statement of Cash Flows
Cash inflows
• Sell goods or services
• Sell other assets or by borrowing
• Receive cash from investments by owners
Cash outflows
• Pay operating expenses
• Expand operations, repay loans
• Pay owners a return on investment
16. Match Classification of
Cash Flows
• Operating activities – Transactions and events
that enter into the determination of net income.
• Investing activities – Transactions and events
that involve the purchase and sale of securities,
property, plant, equipment, and other assets not
generally held for resale, and the making and
collecting of loans.
• Financing activities – Transactions and events
whereby resources and obtained from, or
repaid to, owners and creditors.
17. Operating Activities
Cash Inflow
• Sale of goods or
services
• Sale of investments
in trading securities
• Interest revenue
• Dividend revenue
Cash Outflow
• Inventory payments
• Interest payments
• Wages
• Utilities, rent
• Taxes
18. Investing Activities
Cash Inflow
• Sale of plant assets
• Sale of securities,
other than trading
securities
• Collection of principal
on loans
Cash Outflow
• Purchase of plant assets
• Purchase of securities,
other than trading
securities
• Making of loans to
other entities
19. Financing Activities
Cash Inflow
• Issuance of own stock
• Borrowing
Cash Outflow
• Dividend payments
• Repaying principal on
borrowing
• Treasury stock purchase
21. The Example Company
Statement of Cash Flows
December 31, 2011
Cash Flows From Operating Activities:
Receipts 48
Payments (43) 5
Cash Flows From Investing Activities:
Receipts 0
Payments (4) (4)
Cash Flows Used By Financing Activities:
Receipts 10
Payments (6) 4
Net Cash Flow 5
22. Balance Sheet 12/31/10
Cash $ 80,000
Other 4,550,000
Total $4,630,000
Liabilities $2,970,000
Cap. stock 900,000
R/E 760,000
Total $4,630,000
Revenues $12,443,000
Expenses 11,578,400
Net income $ 864,600
Income Statement
Cash $ 110,000
Other 4,975,000
Total $5,085,000
Liabilities $2,860,400
Cap. stock 1,000,000
R/E 1,224,600
Total $5,085,000
Balance
Sheet 12/31/11
Cash--Op. Act. $ 973,000
Cash--Inv. Act. (1,188,000)
Cash--Fin. Act. 245,000
Net increase $ 30,000
Beg. cash 80,000
End. cash $ 110,000
Cash Flow Statement
R/E 12/31/10 $ 760,000
Net income 864,600
Dividends (400,000)
R/E 12/31/11 $1,224,600
Stmt of Retained Earnings
23. Notes to the Financial Statements
• Notes are used to convey information
required by GAAP or to provide
further explanation.
24. Notes to the Financial Statements
Four general types of notes:
Summary of significant accounting policies:
assumptions and estimates.
Additional information about the summary
totals.
Disclosure of important information that is not
recognized in the financial statements.
Supplementary information required by the
FASB or the SEC.
25. • Separate Entity Concept
• Cost Principle
• Monetary Measurement Concept
• Going Concern Assumption
What Are The Fundamental
Concepts and Assumptions?
26. Entity ─ The organizational unit for which
accounting records are maintained.
Separate entity concept ─ The activities of an
entity are to be separate from those of its
individual owners.
• Proprietorship
• Partnership
• Corporation
Separate Entity Concept
27. The Cost Principle
• All transactions are recorded at historical cost.
• Historical cost is assumed to represent the fair
market value of the item at the date of the
transaction because it reflects the actual use of
resources by independent parties.
28. The Monetary Measurement
Concept
• Accountants measure only those economic
activities that can be measured in monetary
terms.
• Listed values may not be the same as actual
market values:
– Inflation
– Measurement issues
29. The Going Concern Assumption
• An entity will have a continuing existence
for the foreseeable future.
30. Why Use Accrual Accounting?
• GAAP – Generally Accepted Accounting
Principles
• Business requires periodic, timely reporting
• Accrual-basis accounting better measures a firm’s
performance than does cash flow data.
31. The Time Period Concept
The life of a business is divided into distinct
and relatively short time periods so the
accounting information can be timely,
generally 12 months or less.
32. Define Accrual Accounting
• A system of accounting in which revenues and
expenses are recorded as they are earned and
incurred, not necessarily when cash is received
or paid.
• Provides a more accurate picture of a
company’s profitability.
• Statement users can make more informed
judgments concerning the company’s earnings
potential.
33. Revenue Recognition
Revenues are recorded when two main criteria are
met:
Cash has either been
collected or collection is
reasonably assured.
The earning process is
substantially complete
34. The Matching Principle
• All costs and expenses incurred in generating
revenues must be recognized in the same
reporting period as the related revenues.
• This process of matching expenses with
recognized revenues determines the amount of net
income reported on the income statement.
Costs and ExpensesCosts and Expenses
Related RevenuesRelated Revenues
35. Cash-Basis Accounting
• Revenues and expenses are recognized only
when cash is received or payments are made.
• Mainly used by small businesses.
• Not an accurate picture of true profitability.
36. During 2010, Crown Consulting billed its client for
$48,000. On December 31, 2010, it had received
$41,000, with the remaining $7,000 to be received in
2011. Total expenses during 2010 were $31,000 with
$3,000 of these costs not yet paid at December 31.
Determine net income under both methods.
Cash-Basis Accounting
Cash receipts
$41,000
Cash disbursement
28,000
Accrual-Basis Accounting
Revenues earned $48,000
Expenses incurred $31,000
Income $17,000
Accrual vs. Cash-Basis Accounting