Introduction to financial statements 06052013

Introduction to financial statements 06052013

• 1.
  5 June 2013
• 2.
   Statement ofComprehensive Income (Income Statement)  Statement of Changes in Equity  Statement of Financial Position (Balance Sheet)  Statement of Cash Flows  Notes to Financial Statements
• 3.
   Reports therevenue and expenses for a specific period of time  Revenue is listed first, followed by expenses  Investment and withdrawal transactions between the owner and the business are not included in the measurement of profit
• 4.
   Reports thechanges in owner’s equity for a specific period of time  Beginning owner’s equity, owner’s investments, profit (loss) and owner’s drawings  Information in this statement indicates the reasons why owner’s equity has increased or decreased during the period.
• 5.
   Reports theassets, liabilities and owner’s equity at a specific date  Total assets must equal total liabilities plus owner’s equity  A snapshot of the business’s financial condition at a specific moment in time
• 6.
   Provides informationon the cash receipts and payments for a specific period of time  Operating activities, investing activities, financing activities
• 7.
   Additional informationprovided in a company’s financial statements.  Notes to the financial statements report the details and additional information that are left out of the main reporting documents.
• 8.
   Report Form– assets are listed above liabilities and owner’s equity  Account Form – the assets section is placed on the left and the liabilities and owner’s equity sections on the right
• 9.
  Current Assets Cash P65,189.00 Trade and Other Receivables 171,120.00 Merchandise Inventory 75,150.00 Prepaid Expenses 15,815.00 Total Current Assets P 327,274.00 Non-current Assets Property, Plant and Equipment 151,920.00 TOTAL ASSETS P 479,194.00 Current Liabilities Trade and Other Payables P 177,206.00 Non-current Liabilities Mortgage Payable 120,000.00 Total Liabilities 297,206.00 Owner's Equity Cora, Capital 181,988.00 TOTAL LIABILITIES AND OWNER'S EQUITY P 479,194.00 RYE CO. Statement of Financial Position as at December 31, 2012 Assets Liabilities and owner's equity
• 10.
  Current Assets CurrentLiabilities Cash P 65,189.00 Trade and Other Payables P 177,206.00 Trade and Other Receivables 171,120.00 Merchandise Inventory 75,150.00 Non-current Liabilities Prepaid Expenses 15,815.00 Mortgage Payable 120,000.00 Total Current Assets P 327,274.00 Total Liabilities 297,206.00 Non-current Assets Owner's Equity Property, Plant and Equipment 151,920.00 Cora, Capital 181,988.00 TOTAL ASSETS P 479,194.00 TOTAL LIABILITIES AND OWNER'S EQUITY P 479,194.00 Assets Liabilities and owner's equity RYE CO. Statement of Financial Position as at December 31, 2012
• 11.
   Natural Form– one where expenses are classified according to the nature of expense  Functional form – one where expenses are classified according to the function of expense
• 12.
  Income Service Income 50,800.00 InterestIncome 5,000.00 Rent Income 12,000.00 Total Revenue 67,800.00 Expenses Supplies Expense 5,000.00 Salaries Expense 4,600.00 Utilities Expense 7,820.00 Depreciation Expense 3,280.00 Interest Expense 400.00 Total Expense 21,100.00 Profit 46,700.00 KYE CO. Income Statement For the period December 31, 20X9
• 13.
  Net Sales 645,845.00 Less:Cost of Goods Sold 458,882.00 Gross Profit 186,963.00 Add: Other Income 2,122.00 Less: Other Expenses Distribution Costs 20,725.00 General and Administrative Costs 95,494.00 Finance Costs 5,485.00 Net Income (Loss) 67,381.00 RYE CO. Income Statement For the period December 31, 20X9
• 14.
  OWNER’S EQUITY INCREASES DECREASES Investments by Owner Revenue Withdrawalsby Owner Expenses
• 15.
  Cora, Capital -beginning 120,007.00 Add: Net Income 67,381.00 Less: Cora, Drawing 5,400.00 Cora, Capital - end 181,988.00 RYE CO. Statement of Changes in Owner's Equity For the period December 31, 20X9