CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 15-1
Preparing an Income Statement
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-1
INCOME STATEMENT INFORMATION ON A WORK SHEET page 448
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-1
6. Contra account amounts
REVENUE SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS
1
2
3 4
5
6 78 9
1. Heading
7. Contra account total
3. Title of revenue account 8. Net Sales
4. Sales amount 9. Net sales amount
5. Less contra accounts
2. Revenue section
page 449
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-1
COST OF MERCHANDISE SOLD SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS
1
23
page 450
465
1. Cost of Merchandise Sold section
2. Beginning inventory
3. Purchases section
4. Total cost of merchandise available for sale
5. Ending inventory
6. Cost of merchandise sold
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-1
COMPLETING AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS
1
2
4
5
page 452
7
36
7. Component percentage
6. Double lines
5. Net Income after Federal Income Tax
4. Less Federal Income Tax Expense
3. Net Income before Federal Income Tax
2. Expenses section
1. Gross Profit on Sales
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-1
TERMS REVIEW
net sales cost of merchandise sold gross profit on sales
page 454
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 15-2
Analyzing an Income Statement
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-2
ANALYZING AN INCOME STATEMENT SHOWING A NET LOSS page 457
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-2
Price-EarningsRatio
=Earnings
perShare
÷Market Price
per Share
Earningsper Share
=Number of
SharesOutstanding
÷Net Incomeafter FederalIncome Tax
FINANCIAL RATIOS page 459
Earnings per Share
Price-Earnings Ratio
$32.13=2,500÷$80,313.95
10.7=$32.13÷$345.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-2
TERMS REVIEW
financial ratio earnings per share price-earning ratio
page 460
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 15-3
Preparing a Statement of Stockholders’ Equity
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-3
CAPITAL STOCK SECTION OF THE STATEMENT OF STOCKHOLDERS’ EQUITY
12
34
5
page 461
1. Heading
2. Capital Stock and Par Value
5. Total stock issued at the end of the year
3. Stock at the beginning of the year
4. Stock issued during the year
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-3
RETAINED EARNINGS SECTION OF THE STATEMENT OF STOCKHOLDERS’ EQUITY
123
4
page 462
4. Dividends declared
6
7
5
2. Beginning balance
7. Total stockholders’ equity6. Ending balance3. Net income after federal
income tax
5. Increase in retained earnings1. Retained Earnings
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-3
TERMS REVIEW
statement of stockholders’ equity par value
page 463
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 15-4
Preparing a Balance Sheet
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-4
BALANCE SHEET INFORMATION ON A WORK SHEET page 464
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-4
CURRENT ASSETS SECTION OF A BALANCE SHEET
1
2
3
4
5
page 465
3. Book value of accounts receivable
4. Remaining current asset accounts1. Heading
2. Begin assets section 5. Current assets
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-4
PLANT ASSETS SECTION OF A BALANCE SHEET
1
2
3
page 466
4
51. Write the heading Plant Assets.
2. Calculate the book value of office equipment.
3. Use the same procedure to calculate the book value of store equipment.
4. Calculate total plant assets.
5. Calculate total assets.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-4
LIABILITIES SECTION OF A BALANCE SHEET
1
3
page 467
1. Heading
2. Account title and amount of each current liability
3. Total liabilities
2
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-4
STOCKHOLDERS’ EQUITY SECTION OF A BALANCE SHEET
1
page 468
5. Total liabilities and stockholders’ equity
4
5
23
2. Capital stock
1. Stockholders’ Equity
3. Retained earnings
4. Total stockholders’ equity
6. Double rules6
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-4
COMPLETED BALANCE SHEET page 469
(continued on next slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-4
COMPLETED BALANCE SHEET page 469
(continued from previous slide)
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 15-4
TERMS REVIEW
current liabilities long-term liabilities supporting schedule
page 471
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