© 2004 The McGraw-Hill Companies McGraw-Hill/Irwin 1-1 1. Name of entity 2. Title of statement 3....
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© 2004 The McGraw-Hill Companies McGraw-Hill/Irwin 1-1 M AXID R IVE C O RP. B alance Sheet AtD ecem ber 31,2014 (in thousands ofdollars) Assets C ash 4,895 $ Accounts receivable 5,714 Inventories 8,517 Plantand equipm ent 7,154 Land 981 Totalassets 27,261 $ Liabilities and Stockholders'Equity Liabilities Accounts payable 7,156 $ N otes payable 9,000 Totalliabilities 16,156 $ Stockholders'Equity C ontributed capital 2,000 $ R etained earnings 9,105 Totalstockholders'equity 11,105 Totalliabilities and stockholders'equity 27,261 $ 1. Name of entity 2. Title of statement 3. Specific date 4. Unit of measure The Balance Sheet reports the financial position of an entity at a particular point in time.
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Transcript of © 2004 The McGraw-Hill Companies McGraw-Hill/Irwin 1-1 1. Name of entity 2. Title of statement 3....
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-1MAXIDRIVE CORP.Balance Sheet
At December 31, 2014(in thousands of dollars)
AssetsCash 4,895$ Accounts receivable 5,714 Inventories 8,517 Plant and equipment 7,154 Land 981 Total assets 27,261$
Liabilities and Stockholders' EquityLiabilities
Accounts payable 7,156$ Notes payable 9,000
Total liabilities 16,156$ Stockholders' Equity
Contributed capital 2,000$ Retained earnings 9,105 Total stockholders' equity 11,105
Total liabilities and stockholders' equity 27,261$
1. Name of entity2. Title of statement3. Specific date4. Unit of measure
The Balance Sheet
reports the financial
position of an entity at a particular
point in time.
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-2MAXIDRIVE CORP.Balance Sheet
At December 31, 2014(in thousands of dollars)
AssetsCash 4,895$ Accounts receivable 5,714 Inventories 8,517 Plant and equipment 7,154 Land 981 Total assets 27,261$
Liabilities and Stockholders' EquityLiabilities
Accounts payable 7,156$ Notes payable 9,000
Total liabilities 16,156$ Stockholders' Equity
Contributed capital 2,000$ Retained earnings 9,105 Total stockholders' equity 11,105
Total liabilities and stockholders' equity 27,261$
Use $ on the first item in a
groupand on the group total.
Assets = Liabilities + Stockholders’ Equity
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-3
1. Name of entity2. Title of statement 3. Specific date (Unlike the balance sheet, this statement covers a specified period of time.)4. Unit of measure
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-4
The Income Statement reports the revenues less expenses of the
accounting period.
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-5
Revenues
June 2014
Cash from salecollected on June 10th.
XMay 2014
$1,000 sale madeon May 25th.
X
When will the revenue from thistransaction be recognized?
Earnings from the sale of goods or services.
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-6
Revenue
May 2014
$1,000 revenue$1,000 revenuerecognized in Mayrecognized in May
June 2014
When will the revenue from thistransaction be recognized?
Earnings from the sale of goods or services.
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-7
Expenses
May 2014 June 2014
May 11 paid $75 cashfor newspaper ad.
X
Ad appearson June 8th.
X
The dollar amount of resources usedup by the entity to earn revenues
during a period.
When will the expense for thistransaction be recognized?
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-8
Expenses
May 2014 June 2014
Advertising expenseAdvertising expenserecorded in June.recorded in June.
The dollar amount of resources usedup by the entity to earn revenues
during a period.
When will the expense for thistransaction be recognized?
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-9
MAXIDRIVE CORP.Statement of Retained Earnings
For the Year Ended December 31, 2014(in thousands of dollars)
Retained earnings, January 1, 2014 6,805$ Net income for 2014 3,300 Dividends for 2014 (1,000) Retained earnings, December 31, 2014 9,105$
1. Name of entity2. Title of statement 3. Specific date (Like the income statement, this statement covers a specified period of time.)4. Unit of measure
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-10
MAXIDRIVE CORP.Statement of Retained Earnings
For the Year Ended December 31, 2014(in thousands of dollars)
Retained earnings, January 1, 2014 6,805$ Net income for 2014 3,300 Dividends for 2014 (1,000) Retained earnings, December 31, 2014 9,105$
The Statement of Retained Earnings reports the way that net income and the distribution of dividends affect the financial position of the company during a period.
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-11MAXIDRIVE CORP.
Statement of Cash Flows
For the Year Ended December 31, 2014
(in thousands of dollars)
Cash flows from operating activities: Cash collected from customers 33,563$ Cash paid to suppliers and employees (30,854) Cash paid for interest (450) Cash paid for taxes (1,190) Net cash flow from operating activities 1,069$ Cash flow from investing activities: Cash paid to purchase equipment (1,625)$ Net cash flow from investing activities (1,625) Cash flow from financing activities: Cash received from bank loan 1,400$ Cash paid for dividends (1,000)
Net cash flow from financing activities 400
Net decrease in cash during the year (156)$ Cash at beginning of the year 5,051
Cash at end of the year 4,895$
1. Name of entity2. Title of statement 3. Specific date (Like the income statement and statement of retained earnings, this statement covers a specified period of time.)4. Unit of measure
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-12MAXIDRIVE CORP.
Statement of Cash Flows
For the Year Ended December 31, 2009
(in thousands of dollars)
Cash flows from operating activities: Cash collected from customers 33,563$ Cash paid to suppliers and employees (30,854) Cash paid for interest (450) Cash paid for taxes (1,190) Net cash flow from operating activities 1,069$ Cash flow from investing activities: Cash paid to purchase equipment (1,625)$ Net cash flow from investing activities (1,625)
Cash flow from financing activities:
Cash received from bank loan 1,400$
Cash paid for dividends (1,000)
Net cash flow from financing activities 400
Net decrease in cash during the year (156)$
Cash at beginning of the year 5,051
Cash at end of the year 4,895$
The Statement of Cash Flows reports the inflows and outflows of cash during the period in the
categories of operating, investing, and financing.
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-13
Relationship Among the Financial Statements
MAXIDRIVE CORP.Statement of Retained Earnings
For the Year Ended December 31, 2014(in thousands of dollars)
Retained earnings, January 1, 2012 6,805$ Net income for 2012 3,300 Dividends for 2012 (1,000) Retained earnings, December 31, 2012 9,105$
Net income from the income statement increases ending
retained earnings on the statement of retained
earnings.
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-14
Relationship Among the Financial Statements
MAXIDRIVE CORP.Statement of Retained Earnings
For the Year Ended December 31, 2014(in thousands of dollars)
Retained earnings, January 1, 2012 6,805$ Net income for 2012 3,300 Dividends for 2012 (1,000) Retained earnings, December 31, 2012 9,105$
Ending retained earnings from the statement of
retained earnings is one of the components of
stockholders’ equity on the balance sheet.
MAXIDRIVE CORP.Balance Sheet
At December 31, 2014(in thousands of dollars)
AssetsCash 4,895$ Accounts receivable 5,714 Inventories 8,517 Plant and equipment 7,154 Land 981 Total assets 27,261$
Liabilities and Stockholders' EquityLiabilities
Accounts payable 7,156$ Notes payable 9,000
Total liabilities 16,156$ Stockholders' Equity
Contributed capital 2,000$ Retained earnings 9,105 Total stockholders' equity 11,105
Total liabilities and stockholders' equity 27,261$
© 2004 The McGraw-Hill CompaniesMcGraw-Hill/Irwin
1-15
Relationship Among the Financial Statements
The change in cash on the statement of cash flows added to the beginning of the year balance in cash equals the ending
balance in cash on the balance sheet.
MAXIDRIVE CORP.Balance Sheet
At December 31, 2014(in thousands of dollars)
AssetsCash 4,895$ Accounts receivable 5,714 Inventories 8,517 Plant and equipment 7,154 Land 981 Total assets 27,261$
Liabilities and Stockholders' EquityLiabilities
Accounts payable 7,156$ Notes payable 9,000
Total liabilities 16,156$ Stockholders' Equity
Contributed capital 2,000$ Retained earnings 9,105 Total stockholders' equity 11,105
Total liabilities and stockholders' equity 27,261$
MAXIDRIVE CORP.
Statement of Cash Flows
For the Year Ended December 31, 2014
(in thousands of dollars)
Cash flows from operating activities: Cash collected from customers 33,563$ Cash paid to suppliers and employees (30,854) Cash paid for interest (450) Cash paid for taxes (1,190) Net cash flow from operating activities 1,069$ Cash flow from investing activities: Cash paid to purchase equipment (1,625)$ Net cash flow from investing activities (1,625) Cash flow from financing activities: Cash received from bank loan 1,400$ Cash paid for dividends (1,000)
Net cash flow from financing activities 400
Net decrease in cash during the year (156)$ Cash at beginning of the year 5,051
Cash at end of the year 4,895$
