Acct 221 1st Edition Lecture 3 Outline of Last Lecture I Outline of Transactions II Financial Statements Current Lecture II Review of the Financial Statements Current Lecture During this lecture Professor Lowry went into a deeper discussion on the financial statements taking you through step by step The steps are as followed Note that all accounts should appear in the order shown First form the income statement You ll need Revenue Expenses Revenue Expenses Net Income if income positive or Net loss if income is negative Net Income or Net Loss just calculated above Next comes the Statement of Changes in Stockholder s Equity You ll need Beginning common stock Stock issued during the year Beginning common stock stock issued ending common stock Ending common stock just calculated above Beginning retained earnings Net Income or Loss take the number directly from the income statement which we calculated above Dividends Beginning RE Net Income or Net Loss Dividends Ending Retained Earnings Ending Retained Earnings just calculated above Ending common stock ending retained earnings Total Stockholders Equity Total Stockholders Equity just calculated above Next is the 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 You ll need Assets List all assets in your company in order from most liquid cash to least underneath the asset title Total assets Liabilities List all liabilities underneath the liability title Stockholders Equity Common stock Retained Earnings take from statement of changes in stockholder s equity Total Stockholder s Equity Total Liabilities and Stockholder s Equity Statement of Cash Flows You ll need Cash flows from Operating Activities Cash Receipts from revenue Cash Payments from expenses Net Cash flow from Operating Activities Cash Flows from Investing Activities Cash Payments for land Net Cash flow from Investing Activities Cash Flow from Financing Activities Cash Receipts from borrowing money Cash Receipts for issuing common stock Cash Payments for dividends Net Cash Flow from Financing Activities Net Increase in Cash Net Cash flows from Operating Financing and Investing Activities summed together Plus beginning cash balance if there is one Ending Cash Balance Net Increase in Cash Beginning Cash Balance To see a complete list of the four financial statements refer to page 21 in your textbook or to the previous lecture notes posted Lecture 2
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