ACCT 200 Lecture 3 Outline of Last Lecture I II III IV V VI Review What is a Business Forms of Business Cost Emphasis Business Cycle Ethics Outline of Current Lecture I Homework problem E1 5 II Homework Problem E1 10 E1 11 III Homework Problem E1 12 IV Homework Problem E1 20 V Homework Problem P1 5 Current Lecture I Homework problem E1 5 Assets Liabilities Stockholders Equity a X 70 000 90 000 160 000 b X 95 000 18 000 77 000 c X 675 000 227 000 448 000 II Homework Problem E1 10 E1 11 1 Accounts Receivable asset Balance Sheet 2 Capital Stock equity Balance Sheet 3 Cash asset Balance Sheet These 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 Statement 5 Rent Expenses expenses Income Statement 6 Salaries Expenses expenses Income Statement 7 Salaries Payable liability Balance Sheet 8 Supplies assets Balance Sheet 9 Supplies Expense expense Income Statement 10 Utilities Expense expense Income Statement III Homework Problem E1 12 1 Amounts due from customers assets 2 Amounts owed suppliers liability 3 Cash on hand assets 4 Cash paid to stockholders dividends 5 Cash sales revenues 6 Equipment assets 7 Note payable owed to bank liability 8 Rent paid for month expense 9 Sales commissions paid to salespersons expenses 10 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 20 a Operating Cash Flows Net i Cash received from customers 220 000 600 000 ii Cash paid expenses b Investing Cash Flows Net i Cash paid for equipment c Financing Cash Flows Net V 380 000 95 000 95 000 250 000 i Cash received from capital stock 200 000 ii Cash received from notes payable 75 000 iii Cash paid as dividends 25 000 Net Increase in Cash 375 000 Homework Problem P1 5 a Income Statement i Revenues 1 Sales 800 000 2 Total Revenues 800 000 ii Expenses 1 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 b Retained Earnings Statement 230 000 i Beginning Retained Earnings 0 ii Year Net Income from income statement 230 000 iii Current Year Dividends 30 000 iv Increase in Retained Earnings 230 000 30 000 200 000 v Ending Retained Earnings 200 000 c Balance Sheet i Assets 1 Cash X 2 Accounts Receivable 110 000 3 Inventories 115 000 4 Prop Plant Equip 265 000 5 Total Assets 490 000 X ii Liabilities 1 Accounts Payable 20 000 2 Income Taxes Payable 8 000 3 Notes Payable 50 000 4 Total Liabilities 78 000 iii Stockholders Equity 1 Capital Stock 252 000 2 Retained Earnings 200 000 3 Total Stockholders Equity 452 000 iv Total Liabilities and Stockholders Equity 530 000 Assets 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 Flows i Operating Cash Flows 1 Operating cash receipts 690 000 2 Operating cash payments 657 000 3 Net Operating flow 33 000 ii Investing Cash Flows 1 Purchase of prop plant equip 265 000 2 Net Investing Flow 265 000 iii Financing Cash Flows 1 Cash receipt from Note Payable 50 000 2 Cash receipt from Stock Issuance 252 000 3 Dividends 30 000 4 Net Financing Flow 265 000 iv Net Increase in Cash for 2013 40 000 v Beginning January 1 2013 cash 0 vi Ending December 31 2013 40 000 We know this is right because our ending cash equals the X we solved for on the balance sheet