Popular in Course
Popular in Business
This 0 page Class Notes was uploaded by Edward Wuckert I on Sunday November 1, 2015. The Class Notes belongs to BUS at Indiana University taught by Vivian Winston in Fall. Since its upload, it has received 7 views. For similar materials see /class/233457/bus-indiana-university in Business at Indiana University.
Reviews for A 100
Report this Material
What is Karma?
Karma is the currency of StudySoup.
Date Created: 11/01/15
Balance Sheet Assets Current assets Cash Accounts Receivable Inventory Shortterm investments Prepaid rent insurance etc we own Etc What we owe Longterm investments Stock investments we re worth Bond investments Land held for resale Etc Fixed assets qE ILPment Revenue What we earn UI Ings What we use u Land Expenses p lntangIble assets Net income Patents Net income Copyrights Trademarks Goodwill Liabilities Current liabilities Accounts Payable Wages Payable Beginning retained earnings Utilities Payable Net Income Shortterm Notes Payable Dividends Etc Longterm abilities Ending Retained Earnings Notes Payable Bonds Payable Stockholders Equity Common Stock Retained Earnings Together the income statement amp statement of retained earnings explain how retained earnings changes between balance sheet dates The income statement shows how much ofthe increase in retained earnings is due to the business doing what it is supposed to do earning a profit net income The statement of retained earnings provides a specific location to present dividends and reconciles the beginning and ending retained earnings The order is which you work through these problems is crucial It is important that 1 you record the transactions 2 determine the net income then compute the ending retained earnings by completingthe statement of retained earnings and then use that final retained earnings to record in the stockholders39 equity section ofthe balance sheet Afteryou have done this you can check to see ifthe 4 balance sheet balances Every time a company sells merchandise its stock in trade it must make two balancing entries 1 Record the sale by increasing Revenue and increasing either Cash or Accounts Receivable 2 Transfer the cost of the inventory sold from the balance sheet to the income statement Inventory on the balance sheet is reduced and quotCost of Goods Soldquot on the income statement is increased When a company sells an asset other than its stock in trade only one entry is needed Remove the asset Record the cash received Recognize any gain or loss on the sale 0 Statement of Cash Flows Financing Transactions with stockholders and bankers except interest Investing Buying and selling land buildings and equipment Operating Everything else 0 Statement of Cash Flows Beginning cash Cash flows from operations Cash flows from investing Cash flows from financing Ending cash 0 Statement of Cash Flows Only include cash transactions the company made during the period If no cash was received or paid the transaction does not go on this statement