Chapter 8 Section 1 The income statement

Step #7 in the accounting cycle Our job now is to take the information and place it on financial sheet so that our stockholders can read the information better. Our job now is to take the information and place it on financial sheet so that our stockholders can read the information better. Order you must do Financial Sheets Order you must do Financial Sheets Income Statement Income Statement Balance Sheet Balance Sheet

Heading of the Income Statement Name of the Company Name of the Company Name of the financial sheet Name of the financial sheet Time of when the sheet is created Time of when the sheet is created

Income Statement with 2 Sources of Revenue We need to look at page 179 in your text book so you understand how to put together an Income Statement when you have more than 1 Revenue Account. We need to look at page 179 in your text book so you understand how to put together an Income Statement when you have more than 1 Revenue Account.

Calculating Percentages % of Sales To calculate: divide 2100/2650 = 79.2% 550/2650=20.8% Proof: – 79.2 = 20.8

Cross through Work together on page 157 in your work book. Cross through Work together on page 157 in your work book. We will do the On Your Own on page 158 together. We will do the On Your Own on page 158 together.

Chapter 8 Section 2 The Balance Sheet

What types of accounts go on the balance sheet? What types of accounts go on the balance sheet? Asset Asset Liabilities Liabilities Owners Equity Owners Equity

Asset Cash in Bank Accounts Receivable-City News Accounts Receivable-Green Company Computer Equipment Office Equipment Delivery Equipment Total Assets Liabilities Accounts Payable – Beacon Advertising Accounts Payable – North Shore Auto Total Liabilities Owners Equity Maria Sanchez, Capital Total Liabilities and Owners Equity

Asset Cash in Bank Accounts Receivable-City News Accounts Receivable-Green Company Computer Equipment Office Equipment Delivery Equipment Total Assets Liabilities Accounts Payable – Beacon Advertising Accounts Payable – North Shore Auto Total Liabilitie3s Owners Equity Maria Sanchez, Capital Total Liabilities and Owners Equity The only part of the Balance sheet that is different is how do we calculate The owner’s Capital Account?

In order to find the right number to go into the Capital balance there is an equation That we need to remember. How much did we start with = Beginning Capital Balance How much did we make = Net Income How much did we take away (Drawing) = Balance in drawing account = This is the number that goes on The Balance Sheet Net income from either our Income Statement sheet or our worksheet

Asset Cash in Bank Accounts Receivable-City News Accounts Receivable-Green Company Computer Equipment Office Equipment Delivery Equipment Total Assets Liabilities Accounts Payable – Beacon Advertising Accounts Payable – North Shore Auto Total Liabilities Owners Equity Maria Sanchez, Capital Total Liabilities and Owners Equity Now that we have the rest of the numbers we can finish the balance sheet Note how this balance sheet differs from those we did at the beginning of the semester!!!!!

Example problems We need to practice together how to do the new balance sheet. Please cross out page 159 in your work book. We will do page 160 together We need to practice together how to do the new balance sheet. Please cross out page 159 in your work book. We will do page 160 together Expect that there will be a test this week (probably Wednesday) on how to put together a Balance Sheet (the new way) and an Income Statement Expect that there will be a test this week (probably Wednesday) on how to put together a Balance Sheet (the new way) and an Income Statement Problems 8-1, 2, 3 Problems 8-1, 2, 3