ACCT 200 Lecture 3 Outline of Last Lecture I. ReviewII. What is a Business?III. Forms of BusinessIV. Cost EmphasisV. Business CycleVI. EthicsOutline of Current Lecture I. Homework problem E1-5II. Homework Problem E1-10/E1-11III. Homework Problem E1-12IV. Homework Problem E1-20V. Homework Problem P1-5Current LectureI. Homework problem E1-5 (Assets=Liabilities + Stockholders’ Equity)a. X= 70,000 + 90,000 = 160,000b. X= 95,000 – 18,000 = 77,000c. X= 675,000 – 227,000 = 448,000II. Homework Problem E1-10/E1-11 1. Accounts Receivable=asset Balance Sheet2. Capital Stock=equity Balance Sheet3. Cash=asset Balance SheetThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.4. Fees Earned=revenues Income Statement5. Rent Expenses=expenses Income Statement6. Salaries Expenses=expenses Income Statement7. Salaries Payable=liability Balance Sheet8. Supplies=assets Balance Sheet9. Supplies Expense=expense Income Statement10. Utilities Expense=expense Income StatementIII. Homework Problem E1-121. Amounts due from customers—assets 2. Amounts owed suppliers—liability3. Cash on hand—assets4. Cash paid to stockholders—dividends5. Cash sales—revenues 6. Equipment—assets7. Note payable owed to bank—liability8. Rent paid for month—expense9. Sales commissions paid to salespersons—expenses10. Wages paid to employees—expense (*The difference between “wages paid” and “wage payable” is the tense; “paid” means past,“payable” means it is to be paid in the future. Past= expenses; future=liabilities.)IV. Homework Problem E1-20a. Operating Cash Flows Net $220,000i. Cash received from customers $600,000ii. Cash paid expenses ($380,000)b. Investing Cash Flows Net $95,000i. Cash paid for equipment ($95,000)c. Financing Cash Flows Net $250,000i. Cash received from capital stock $200,000ii. Cash received from notes payable $75,000iii. Cash paid as dividends ($25,000)Net Increase in Cash $375,000V. Homework Problem P1-5a. Income Statementi. Revenues:1. Sales $800,0002. Total Revenues $800,000ii. Expenses1. Cost of sales expense ($435,000)2. Selling and Admin Expense ($80,000)3. Income Tax Expense ($53,000)4. Interest Expense ($2,000)5. Total Expenses ($570,000)iii. Net Income ($800,000-$570,000) $230,000b. Retained Earnings Statementi. Beginning Retained Earnings $0ii. Year Net Income (from income statement) $230,000iii. Current Year Dividends ($30,000)iv. Increase in Retained Earnings ($230,000-$30,000)$200,000v. Ending Retained Earnings $200,000c. Balance Sheeti. Assets1. Cash X2. Accounts Receivable $110,0003. Inventories $115,0004. Prop. ,Plant, Equip. $265,0005. Total Assets $490,000+Xii. Liabilities1. Accounts Payable $20,0002. Income Taxes Payable $8,0003. Notes Payable $50,0004. Total Liabilities $78,000iii. Stockholders’ Equity1. Capital Stock $252,0002. Retained Earnings $200,0003. Total Stockholders’ Equity $452,000iv. Total Liabilities and Stockholders’ Equity $530,000Assets=Liabilities + Stockholders’ Equity$490,000 + X = $530,000$530,000-$490,000= X$530,000-$490,000= $40,000$40,000 is the cash number that was missing in the Assets section*d. Statement of Cash Flowsi. Operating Cash Flows1. Operating cash receipts $690,0002. Operating cash payments ($657,000)3. Net Operating flow $33,000ii. Investing Cash Flows1. Purchase of prop., plant, equip. ($265,000)2. Net Investing Flow ($265,000)iii. Financing Cash Flows1. Cash receipt from Note Payable $50,0002. Cash receipt from Stock Issuance $252,0003. Dividends ($30,000)4. Net Financing Flow $265,000iv. Net Increase in Cash for 2013 $40,000v. Beginning January 1, 2013 cash $0vi. Ending December 31, 2013 $40,000**We know this is right because our ending cash equals the “X” we solved for on the balance
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