Red Company: Chapters 1 & 2

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Red Company: Chapters 1 & 2


Lecture number:
35
Pages:
2
Type:
Lecture Note
School:
Miami University, Oxford
Course:
Acc 221 - Intro to Financial Accounting
Edition:
1
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Lecture 35 Outline of Previous Lecture ● Section 34: Cash Flow Cont. (2) ♦ Financial statement o Investing o Retained earnings o Balance sheet ♦ Operating + investment - financing o Non cash activity shown as footnote Outline of Current Lecture  Section 35: Red Company: Chapters 1 & 2  Chapter 1 o Income statement and input variables o Balance sheet input variables  Chapter 2 o Vertical analysis of income statement o Vertical analysis of balance sheet o Horizontal analysis of income statement o Horizontal analysis of balance sheet Current Lecture  Section 35: Red Company: Chapters 1 & 2  Chapter 1 o Income Statement and input variables  Net sales  Cost of goods sold percent – helps to determine cost of goods sold  Net sales (value of this variable / 100) = cost of goods sold  Interest percent notes payable – helps to determine interest expense  Notes payable long term (value of variable / 100) = interest expense  Effective income tax rate percent – helps to determine provision for income taxes  Pre-tax income (value of variable / 100) = provision for income taxes o Balance sheet input variables  Number of days’ sales in A/R – helps to determined accounts receivable, net balance.  Number of days’ sales in inventory – helps to determine inventory balance  Purchase of new equipment  Number of days’ purchases in A/P ACC 221 1st Edition



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