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LESSON 4-4 Responsibility Statements for a Merchandising Business

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Presentation on theme: "LESSON 4-4 Responsibility Statements for a Merchandising Business"— Presentation transcript:

1 LESSON 4-4 Responsibility Statements for a Merchandising Business
4/25/2017 LESSON 4-4 Responsibility Statements for a Merchandising Business RED

2 Chapter 4 Objectives Financial Reporting for a Departmentalized Business
After studying Chapter 4, you will be able to: Define accounting terms related to cost accounting and financial reporting for a departmentalized merchandising business. Identify accounting concepts and practices related to cost accounting and financial reporting for a departmentalized merchandising business. Distinguish between direct and indirect expenses. Prepare an interim departmental statement of gross profit. Prepare a work sheet for a departmentalized merchandising business. Prepare financial statements for a departmentalized merchandising business. Analyze financial statements using selected component percentages. Complete end-of-period work for a departmentalized merchandising business. LESSON 4-4

3 Lesson 4-4 responsibility statements: financial statements reporting revenue, costs, and direct expenses under a specific department’s control income statement: a financial statement showing the revenue and expenses for a fiscal period statement of stockholders’ equity: a financial statement that shows changes in a corporation’s ownership for a fiscal period capital stock: total shares of ownership in a corporation LESSON 4-4

4 Lesson 4-4 responsibility statements: financial statements reporting revenue, costs, and direct expenses under a specific department’s control retained earnings: an amount earned by a corporation and not yet distributed to stockholders dividends: earnings distributed to stockholders balance sheet: a financial statement that reports assets, liabilities, and owners’ equity on a specific date LESSON 4-4

5 DEPARTMENTAL MARGIN STATEMENT—AUDIO
page 111 1. Determine net sales for department. 2. Determine cost of merchandise sold for department. 1 2 3. Calculate gross profit. 4. Record direct expenses of the department. 3 4 5. Calculate the departmental margin. 5 LESSON 4-4

6 COMPONENT PERCENTAGES ON DEPARTMENTAL MARGIN STATEMENTS
page 112 Net Sales Departmental Margin Component Percentage for Departmental Margin ÷ = $49,222.61 ÷ = 14.3% $344,476.46 Component Percentages 20X3 20X2 20X1 Departmental Margin 14.3% 13.4% 13.1% LESSON 4-4

7 DEPARTMENTAL MARGIN STATEMENT—VIDEO
page 113 1. Determine net sales for department. 2. Determine cost of merchandise sold for department. 1 2 3. Calculate gross profit. 4. Record direct expenses of the department. 3 4 5. Calculate the departmental margin. 5 LESSON 4-4

8 INCOME STATEMENT WITH DEPARTMENTAL MARGIN
LESSON 4-4 4/25/2017 INCOME STATEMENT WITH DEPARTMENTAL MARGIN page 114 1. Prepare the heading. 1 2-6. Use information from the departmental margin statements. 2-6 7. Use information from the Income Statement columns of the work sheet. 7 8. Complete the income statement. 8 9. Calculate component percentages. 9 LESSON 4-4 RED

9 STATEMENT OF STOCKHOLDERS’ EQUITY
page 115 LESSON 4-4

10 BALANCE SHEET page 116 LESSON 4-4

11 BALANCE SHEET page 116 LESSON 4-4

12 DEFINE TERMS REVIEW In Quizlet
page 117 Edit this set: Chapter 4 AdvAcc (then SAVE) responsibility statements income statement statement of stockholders’ equity capital stock retained earnings dividends balance sheet LESSON 4-4

13 Exit Ticket for today: Audit Your Understanding 4-4
In a Word Document, SaveAS: Chapter4-4AYUYourName And drop in my Inbox today! Where does Zytech obtain the information to prepare the direct expenses section of the income statement? How is the component percentage for departmental margin calculated? What two comparisons can be made using the component percentage for departmental margin to determine if a department is performing satisfactorily? Where does Zytech obtain the information to prepare the indirect expenses section of the income statement? LESSON 4-4

14 Complete the following assignments for Chapter 4-4 today
Define Terms Review on page 117. Answer Audit Your Understanding questions on page 117. Complete Work Together 4-4 on Aplia – page 117. Complete On Your Own 4-4 on Aplia – page 117. Complete Application Problem 4-4 on Aplia – page 127. LESSON 4-4

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