© The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 3-1 3 Reporting and Preparing...
-
Upload
jeffrey-butler -
Category
Documents
-
view
215 -
download
1
Transcript of © The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin Slide 3-1 3 Reporting and Preparing...
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-1
3 Reporting and Preparing Financial Statements
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-2
1 2 3 4 5 6 7 8 9 10 11 12
1 2 3 4
Annual
1 2
Month
Quarter
Semiannual
The Accounting Period
Exh.3.1
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-3
External Transactions occur between the
organization and an outside party.
Internal Transactions occur within the
organization.
Transactions and Events
Exchanges of economic consideration between two parties.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-4
We have delivered theproduct to our customer,
so I think we should recordthe revenue earned.
Recognizing Revenues and Expenses
Revenue Recognition
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-5
Recognizing Revenues and Expenses
Revenue Recognition Matching
Summaryof Expenses
Rent
Gasoline
Advertising
Salaries
Utilities
and . . . .
$1,000
500
2,000
3,000
450
. . . .
Now that we haverecognized the revenue,let’s see what expenses
we incurred togenerate that revenue.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-6
Accounting
Accrual Basis Vs. Cash BasisAccrual Basis
Revenues are recognized when
earned and expenses are recognized when
incurred.
Cash Basis
Revenues are recognized when
cash is received and expenses recorded when cash is paid.
Not GAAPNot GAAPGAAPGAAP
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-7
Fra m ew ork for Adjustm ents
PrepaidExpenses
Depreciation UnearnedRevenues
AccruedExpenses
AccruedRevenues
Adjustm ents
An adjusting entry is recorded to bring an asset or liability account balance to its proper amount.
Transactions where cash is paid orreceived before a related expense
or revenue is recognized.
Transactions where cash is paid orreceived before a related expense
or revenue is recognized.
Adjusting Accounts
Transactions where cash is paid orreceived after a related expense
or revenue is recognized.
Transactions where cash is paid orreceived after a related expense
or revenue is recognized.
Exh.3.4
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-8
Here is the checkfor my first
6 months’ rent.Resources paid
for prior to receiving the
actual benefits.
Resources paid for prior to
receiving the actual benefits.
Asset Expense
UnadjustedBalance
CreditAdjustment
DebitAdjustment
Adjusting Prepaid Expenses
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-9
GENERAL JOURNAL Page 34Date Description PR Debit Credit
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Dec. 31 Rent Expense 2,000
Prepaid Rent 2,000
to record monthly rent
Adjusting Prepaid Expenses
On December 1, 2001, Scott Company paid $12,000 to cover rent for December 2001 through May 2002.
Let’s look at the adjusting journal entry needed on December 31, 2001.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-10
Prepaid Rent Rent Expense12/1 $12,000 12/31 $2,00012/31 $2,000
Adjusting Prepaid Expenses
After posting, the accounts involved look like this:
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-11
Straight-LineDepreciationExpense
= Asset Cost - Salvage Value
Useful Life
Adjusting for Depreciation
Depreciation is the process of computing expense from allocating the cost of plant and equipment over its
expected useful lives.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-12
?2002
DepreciationExpense
= $62,000 - $2,000
5= $12,000
Adjusting for Depreciation
On January 1, 2002, Monroe, Inc. purchased oil pumping equipment for $62,000 cash. The
equipment has an estimated useful life of 5 years and Monroe expects to sell the equipment at the end of
its life for $2,000 cash.
Let’s compute depreciation expense for the year ended December 31, 2002.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-13
GENERAL JOURNAL Page 2Date Description PR Debit Credit
Dec. 31
On January 1, 2002, Monroe, Inc. purchased oil pumping equipment for $62,000 cash. The
equipment has an estimated useful life of 5 years and Monroe expects to sell the equipment at the end of
its life for $2,000 cash.
Prepare the Journal EntryPrepare the Journal Entry
Adjusting for Depreciation
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-14
GENERAL JOURNAL Page 2Date Description PR Debit Credit
Dec. 31 Depreciation Exp. 12,000
Accum. Depreciation 12,000
To record annual depreciation
On January 1, 2002, Monroe, Inc. purchased oil pumping equipment for $62,000 cash. The
equipment has an estimated useful life of 5 years and Monroe expects to sell the equipment at the end of
its life for $2,000 cash.
Adjusting for Depreciation
Accumulated depreciation isa contra asset account.
Accumulated depreciation isa contra asset account.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-15
Equipment Depreciation Expense
1/1 $62,000 12/31 $12,000
Accumulated Depreciation
12/31 $12,000
Adjusting for Depreciation
After posting, the accounts involved look like this:
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-16
The equipment account is shown on
the balance sheet like
this.
Adjusting for Depreciation
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-17
Buy your season tickets forall home basketball games NOW!
““Go Big Blue”Go Big Blue”
Adjusting Unearned Revenue
Cash received in advance of providing
products or services.
Cash received in advance of providing
products or services.
Liability RevenueUnadjusted
BalanceCredit
AdjustmentDebit
Adjustment
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-18
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Oct. 1 Cash 100,000
Unearned Basketball Revenue 100,000
Receipts for 1,000 season tickets
Adjusting Unearned Revenue
On October 1, 2002, Ox University sold 1,000 season tickets to its 20 home basketball games for $100 each. OxU makes the following entry:
On October 1, 2002, Ox University sold 1,000 season tickets to its 20 home basketball games for $100 each. OxU makes the following entry:
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-19
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Dec. 31
Adjusting Unearned Revenue
On December 31, OxU has played 10 of its regular home games, winning 2 and losing 8.
On December 31, OxU has played 10 of its regular home games, winning 2 and losing 8.
Prepare the appropriate Adjusting Entry on December 31
Prepare the appropriate Adjusting Entry on December 31
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-20
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Dec. 31 Unearned Basketball Revenue 50,000
Basketball Revenue 50,000
to recognize basketball revenue
Adjusting Unearned Revenue
On December 31, OxU has played 10 of its regular home games, winning 2 and losing 8.
On December 31, OxU has played 10 of its regular home games, winning 2 and losing 8.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-21
Unearned BasketballRevenue Basketball Revenue
10/1 $100,000 12/31 $50,00012/31 $50,000
After posting, the accounts involvedwill look like this . . .
Adjusting Unearned Revenue
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-22
We’re about one-halfdone with this job and
want to be paid!Costs incurred in a period that areboth unpaid and
unrecorded.
Costs incurred in a period that areboth unpaid and
unrecorded.
Adjusting for Accrued Expenses
Expense LiabilityCredit
AdjustmentDebit
Adjustment
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-23
12/1/02 12/31/02Year end
Last paydate
12/26/02
Next paydate
1/2/03
Record adjustingjournal entry.
Record adjustingjournal entry.
Adjusting for Accrued Expenses
Denton, Inc. pays its employees every Friday. Year-end, 12/31/02, falls on a Wednesday. As of 12/31/02, the employees have earned salaries of $47,250 for Monday
through Wednesday of the week ended 1/02/03.
Denton, Inc. pays its employees every Friday. Year-end, 12/31/02, falls on a Wednesday. As of 12/31/02, the employees have earned salaries of $47,250 for Monday
through Wednesday of the week ended 1/02/03.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-24
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Adjusting for Accrued Expenses
Prepare the appropriate Adjusting Entry on December 31
Prepare the appropriate Adjusting Entry on December 31
Denton, Inc. pays its employees every Friday. Year-end, 12/31/02, falls on a Wednesday. As of 12/31/02, the employees have earned salaries of $47,250 for Monday
through Wednesday of the week ended 1/02/03.
Denton, Inc. pays its employees every Friday. Year-end, 12/31/02, falls on a Wednesday. As of 12/31/02, the employees have earned salaries of $47,250 for Monday
through Wednesday of the week ended 1/02/03.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-25
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Dec. 31 Salaries Expense 47,250
Salaries Payable 47,250
to record salary accrual
Adjusting for Accrued Expenses
Denton, Inc. pays its employees every Friday. Year-end, 12/31/02, falls on a Wednesday. As of 12/31/02, the employees have earned salaries of $47,250 for Monday
through Wednesday of the week ended 1/02/03.
Denton, Inc. pays its employees every Friday. Year-end, 12/31/02, falls on a Wednesday. As of 12/31/02, the employees have earned salaries of $47,250 for Monday
through Wednesday of the week ended 1/02/03.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-26
Salaries Expense Salaries Payable12/31 $47,250
After posting, the accounts involvedwill look like this . . .
12/31 $47,250
Adjusting for Accrued Expenses
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-27
Yes, you can pay mefor your tax return
when I finish the work.
Adjusting for Accrued RevenuesRevenues earned in a period that
are both unrecorded and not yet received.
Asset Revenue
CreditAdjustment
DebitAdjustment
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-28
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Prepare the appropriate Adjusting Entry on December 31
Prepare the appropriate Adjusting Entry on December 31
Adjusting for Accrued Revenues
Smith & Jones, CPAs, had $31,200 of work completed but not yet billed to clients. Let’s make
the adjusting entry necessary on December 31, 2002, the end of the company’s fiscal year.
Smith & Jones, CPAs, had $31,200 of work completed but not yet billed to clients. Let’s make
the adjusting entry necessary on December 31, 2002, the end of the company’s fiscal year.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-29
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Dec. 31 Accounts Receivable 31,200
Service Revenues 31,200
Revenues earned but not received
Adjusting for Accrued Revenues
Smith & Jones, CPAs, had $31,200 of work completed but not yet billed to clients. Let’s make
the adjusting entry necessary on December 31, 2002, the end of the company’s fiscal year.
Smith & Jones, CPAs, had $31,200 of work completed but not yet billed to clients. Let’s make
the adjusting entry necessary on December 31, 2002, the end of the company’s fiscal year.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-30
Accounts Receivable Service Revenue
12/31 $31,20012/31 $31,200
Adjusting for Accrued Revenues
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-31
Type
Balance Sheet
Account
Income Statement Account Adjusting Entry
Prepaid Asset Expense Dr. ExpenseExpenses Overstated Understated Cr. AssetUnearned Liability Revenue Dr. LiabilityRevenues Overstated Understated Cr. RevenueAccrued Liability Expense Dr. ExpenseExpenses Understated Understated Cr. LiabilityAccrued Asset Revenue Dr. AssetRevenues Understated Understated Cr. Revenue
Before AdjustmentSummary of Adjustments and Financial Statement Links
Four major types of transactions requiring adjustment.
Adjustments and Financial Statements
Exh.3.18
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-32
FastForwardTrial Balance
December 31, 2001
Exh.3.19
First, the initial
unadjusted amounts are added to the worksheet.
First, the initial
unadjusted amounts are added to the worksheet.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-33
Next, FastForward’s adjustments are added.
Next, FastForward’s adjustments are added.
FastForwardTrial Balance
December 31, 2001
Exh.3.19
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-34
FastForwardTrial Balance
December 31, 2001Finally, the totals are determined.
Finally, the totals are determined.
Exh.3.19
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-35
Preparing Financial Statements
Let’s use FastForward’s adjusted trial balance to prepare the company’s financial statements.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-36
Step One:Prepare the IncomeStatement.
Exh.3.20
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-37
Step Two:Prepare the Statement of Retained Earnings.
Note: The Net Income from the Income Statement carries to the Statement of Retained Earnings.
Exh.3.20
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-38
Step Three:Prepare the BalanceSheet.
FastForwardBalance Sheet
December 31, 2001
AssetsCash 3,950$ Accounts receivable 1,800 Supplies 8,670 Prepaid insurance 2,300 Equipment 26,000 Less: accum. depr. (375) 25,625 Total assets 42,345$
LiabilitiesAccounts payable 6,200$ Salaries payable 210 Unearned revenue 2,750 Total liabilities 9,160$
Owner's EquityCommon Stock 30,000 Retained Earnings 3,185 Total liabilities and equity 42,345$
Exh.3.20
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-39
Resets revenue, expense and dividend account balances to zero at the end of the period.
Helps summarize a period’s revenues and expenses in the Income Summary account.
Identify accounts for closing.
Record and post closing entries.
Prepare post-closing trial balance.
Closing Process
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-40
Temporary Accounts
Revenues
Income Summary
Exp
ense
s
Divid
end
s
Permanent Accounts
Assets
Lia
bili
ties
Retain
ed
Earn
ing
s
The closing process applies only to
temporary accounts.
The closing process applies only to
temporary accounts.
Temporary and Permanent Accounts
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-41
Let’s see how the closing process
works!
Recording and Posting Closing Entries Close Revenue
accounts to Income Summary.
Close Expense accounts to Income Summary.
Close Income Summary account to Retained Earnings.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-42
Balances before closing.
Income Summary
Revenue Accounts25,000
25,000
Expense Accounts10,000
10,000
Closing Process for a Corporation
Retained Earnings25,000
25,000
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-43
Income Summary25,000
25,000
Close Revenue accounts to Income
Summary.
Revenue Accounts25,000 25,000
-
Expense Accounts10,000
10,000
Closing Process for a Corporation
Retained Earnings25,000
25,000
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-44
Income Summary10,000 25,000
15,000
Revenue Accounts25,000 25,000
-
Close Expense accounts to Income
Summary.
Expense Accounts10,000 10,000
-
Closing Process for a Corporation
The balance in Income Summary equals net
income.
The balance in Income Summary equals net
income.
Retained Earnings25,000
25,000
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-45
Retained Earnings30,000 15,000
45,000
Retained Earnings25,000 15,000
40,000
Close Income Summary to
Retained Earnings.
Revenue Accounts25,000 25,000
-
Expense Accounts10,000 10,000
-
Income Summary10,000 25,000 15,000
-
Closing Process for a Corporation
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-46
Using the adjusted trial balance, let’s prepare the
closing entries for
FastForward.
Exh.3--26
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-47
Close Revenue accounts to
Income Summary.
Exh.3--26
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-48
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Prepare the entry to close Revenues by debiting the revenue accounts and crediting
Income Summary.
Prepare the entry to close Revenues by debiting the revenue accounts and crediting
Income Summary.
Now, let’s look at the ledger accounts after posting this closing entry.
Close Revenue Accounts to Income Summary
Exh.3--26
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-49
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Dec. 31 Consulting Revenue 7,850
Rental Revenue 300
Income Summary 8,150
Now, let’s look at the ledger accounts after posting this closing entry.
Close Revenue Accounts to Income Summary
Exh.3--26
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-50
Income Summary7,850
300
8,150
Consulting Revenue7,850 7,850
-
Rental Revenue300 300
-
Close Revenue Accounts to Income Summary
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-51
Close Expense accounts to
Income Summary.
Exh.3--26
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-52
Now, let’s look at the ledger accounts after posting this closing entry.
Close Expense Accounts to Income Summary
Exh.3--26
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-53
Income Summary375 7,850
1,610 300 100
1,000 1,050
230
3,785 Utilities Expense230 230
-
Depreciation Expense- Eq.
375 375 -
Salaries Expense1,610 1,610
-
Insurance Expense100 100
-
Supplies Expense1,050 1,050
-
Rent Expense1,000 1,000
-
Net Income
Close Expense Accounts to Income Summary
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-54
Close Income Summary to
Retained Earnings.
Exh.3--26
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-55
GENERAL JOURNAL Page 34Date Description PR Debit Credit
Dec. 31 Income Summary 3,785
Retained Earnings 3,785
Now, let’s look at the ledger accounts after posting this closing entry.
Close Income Summary to Retained Earnings
Exh.3--26
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-56
Retained Earnings600 3,785
3,185
Income Summary375 7,850
1,610 300 100
1,000 1,050
230 3,785
-
Close Income Summary to Retained Earnings
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-57
Let’s look at FastForward’s
post-closing trial balance.
Post-Closing Trial Balance
List of permanent accounts and their balances after posting closing entries.
Total debits and credits must be equal.
List of permanent accounts and their balances after posting closing entries.
Total debits and credits must be equal.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-58
Exh.3-27
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-59
The profit margin ratio measures the company’s net income to sales.
ProfitMargin
Net Income Net Sales
=
Using the Information Profit Margin
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-60
Classified Balance Sheet
Typically, the sections of the balance sheet are subdivided based on the liquidity of the various
accounts
Exh.3-30
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-61
Classified Balance Sheet
Let’s look at the asset
section of a classified balance sheet.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-62
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-63
Current assets are assets that will be turned into cash or
expire (be used up) within the longer of one
year or the operating cycle.
Current assets are assets that will be turned into cash or
expire (be used up) within the longer of one
year or the operating cycle.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-64
Property, plant and equipment includes assets
with useful lives of more than one year acquired for use in the
business rather than for resale.
Property, plant and equipment includes assets
with useful lives of more than one year acquired for use in the
business rather than for resale.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-65
Other assets and intangible assets include items such as
patents, goodwill,
copyrights, etc.
Other assets and intangible assets include items such as
patents, goodwill,
copyrights, etc.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-66
Let’s look at the liability section of a classified balance sheet.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-67
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-68
Current liabilities are obligations that will be paid with current assets, normally
within one year.
Current liabilities are obligations that will be paid with current assets, normally
within one year.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-69
Long-term liabilities are debts that have maturity dates extending
beyond one year from the balance sheet date.
Long-term liabilities are debts that have maturity dates extending
beyond one year from the balance sheet date.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-70
Let’s look at the
stockholders’ equity section of a classified balance sheet.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-71
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-72
Contributed capital is often shown in two separate accounts . . .
Common stockPaid-in capital
Contributed capital is often shown in two separate accounts . . .
Common stockPaid-in capital
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-73
Comprehensive income includes gains and losses not included in the
computation of net income.
Comprehensive income includes gains and losses not included in the
computation of net income.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-74
Retained earnings is the accumulated earnings of the company less the accumulated dividends declared.
Retained earnings is the accumulated earnings of the company less the accumulated dividends declared.
© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin
Slide 3-75
End of Chapter 3