Download presentation
Presentation is loading. Please wait.
1
Introduction to Accounting Preparing for a User’s Perspective
Prepare financial statements Debits and Credits Trainer By Kevin C. Kimball, CPA with support from Free Jan. 2014 Available on the Google Play Store Part A
2
The Full Accounting Cycle
Original Transaction Entries Identify Analyze Record Post Prepare Pre-adjusted TB Adjusting Entries Identify Analyze Record Post Prepare Adjusted TB Financial Statements Closing Entries Identify Analyze Record Post Prepare Post-Closing TB Part A
3
Steps in the Accounting Cycle
1) Identify 2) Analyze Steps in the Accounting Cycle a) What accounts? Round 2 b) Increase or decrease? Adjusting Entries c) Amount $? d) Debit or credit? 3) Record 5) Prepare* Date Account Debit Credit 4/8 Utilities Expense 400 Accrued Expenses Adj. Trial Balance DR (CR) 146,590 13,000 10,000 Etc. (3,400) $0 Cash Accounts Receivable Inventory Etc. Accrued Expenses Etc. Total Util. Expense Accrued Liab. 4) Post 3,000 400 400 * This round includes preparation of financial statements Part A
4
Continued on next slide
Suepervantastic Toy Company (STC) Current asset Current asset Current asset Contra asset Current asset Current asset Current asset Noncurrent asset Noncurrent asset Contra asset Contra asset Current liability Current liability Current liability Current liability Current liability Part A
5
Continued from prior slide
Suepervantastic Toy Company (STC) Noncurrent liability Equity Equity - Dividend Equity - Revenue Equity - Expense Equity - Expense Equity - Expense Equity - Expense Equity - Expense Equity - Expense Equity - Expense Equity - Expense Equity - Revenue Equity - Revenue Equity - Expense Equity - Expense Part A
6
Preparing the Financial Statements 1-4
The Income Statement The Statement of Stockholders’ Equity particularly the Statement of Retained Earnings The Balance Sheet The Statement of Cash Flows Part A
7
Part A
8
Part A Suepervantastic Toy Co. Balance Sheet
3/1/X1 Cash Etc. Total Assets Total Liabilities Common Stock Retained Earnings Total Shareholders’ Equity Statement of Cash Flows Operating activities Investing activities Financing activities Change in Cash + Beginning Cash = Ending Cash Suepervantastic Toy Co. Balance Sheet 12/31/X1 Cash Etc. Total Assets Total Liabilities Common Stock Retained Earnings Total Shareholders’ Equity Statement of Shareholders’ Equity Common Retained Stock Earnings Beginning balance + Issuance of stock + Net Income - Dividend = Ending balance Income Statement Revenues Less: Expenses = Net Income Part A
9
The accounting period being reported on
Please take out a scratch piece of paper and use the adjusted account balances on the following page to prepare a Single-Step Income Statement. Formatting hint: Company Name Income Statement The accounting period being reported on List all revenues and their balances Total Revenues $ List all expenses and their balances Total Expenses $ = Net Income $ Earnings per share Part A
10
Part A
11
Income Statement (complete)
Single-Step Income Statement (complete) Part A
12
Income Statement (Page 1)
Single-Step Income Statement (Page 1) Part A
13
Income Statement (Page 2)
Single-Step Income Statement (Page 2) Part A
14
Please take out a scratch piece of paper and use the adjusted account balances on the following page to prepare a Multi-Step Income Statement. Formatting hint: Company Name Income Statement The accounting period being reported on Net Sales Revenues - Cost of Goods Sold = Gross Profit - Operating expenses = Operating Income + Other Revenues – Other Expenses = Income before taxes - Income taxes = Net Income Earnings per share Part A
15
Part A
16
Multi-Step Income Statement (complete) Part A
17
Multi-Step Income Statement (page 1) Part A
18
Multi-Step Income Statement (page 2) Part A
19
Please take out a scratch piece of paper and use the adjusted account balances on the following page and the Net Income from the Income Statement to prepare a Statement of Stockholders’ Equity (aka Statement of Shareholder Equity). Formatting hint: Company Name Statement of Stockholders’ Equity The accounting period being reported on Common Stock Retained Earnings Beginning balance + Net Income Dividends + or – Changes in Stock Outstanding ____________ ______________ Ending balance ____________ ______________ Part B
20
Net Income $71,696 Part B
21
Part B
22
Formatting hint: Please take out a scratch piece of paper and use the adjusted account balances on the following page and the ending Retained Earnings balance from the Statement of Stockholders’ Equity (i.e. specifically the Statement of Retained Earnings) to prepare a classified balance sheet as of 12/31/X1. Company Name Balance Sheet As of the end of the accounting period being reported on Assets Liabilities Current assets $ Current liabilities Noncurrent assets Noncurrent liabilities Total Assets $ Total liabilities $ Stockholders’ Equity Contributed capital Retained Earnings Total Stockholders’ Equity $ Total liabilities and stockholders’ equity $ Part B
23
Part B Current asset Current asset Current asset Current asset
Noncurrent liability Current asset Equity Current asset Current asset Current asset Current asset Current asset Noncurrent asset Noncurrent asset Contra asset Contra asset Current liability Current liability Current liability Current liability Current liability Part B
24
Balance Sheet (page 1) Part B
25
Balance Sheet (page 2) Part B
26
Assets = Liabilities + Equity
$385,890 $220,134 $165,756 $385,890 Part B
27
Statement of Cash Flows
(full statement) Part B
28
Statement of Cash Flows
(page 1) Part B
29
Statement of Cash Flows
(page 2) Part B
30
Introduction to Accounting Preparing for a User’s Perspective
Prepare financial statements Debits and Credits Trainer By Kevin C. Kimball, CPA with support from Free Jan. 2014 Available on the Google Play Store Part B
Similar presentations
