{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Ch13(6th)Post - Chapter F13 Operating Activities 13-2...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Operating Operating Activities Activities Chapter Chapter F13 F13
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
13-2 1. Identify the purpose and major components of the income statement. 2. Explain and apply rules for measuring revenues and receivables and reporting revenue transactions. 3. Describe reporting rules for inventories and cost of goods sold and compare reporting of inventories for merchandising and manufacturing companies. Objectives Objectives
Background image of page 2
13-3 4. Explain and apply rules for measuring cost of goods sold and inventories and describe the effects of income taxes on the choice of inventory estimation method. 5. Identify routine and nonroutine events that affect a company’s income statement. Objectives Objectives
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
13-4 Basic Operating Activities Basic Operating Activities The income statement reports the results of operating activities for a fiscal period on an accrual basis. Obj - 1
Background image of page 4
13-5 For the Year Ended December 31, 2008 2007 Net sales revenue $3,235,600 $686,400 Cost of goods sold (1,954,300 ) (457,600 ) Gross profit 1,281,300 228,800 Selling, general and administrative expenses (1,094,700 ) (148,300 ) Operating income 186,600 80,500 Interest expense (20,400 ) (4,800 ) Pretax income 166,200 75,700 Income taxes (49,860 ) (22,710 ) Net income $ 116,340 $ 52,990 Earnings per share $ 0.29 $ 0.13 Exhibit 1 Exhibit 1 Income Statement for Favorite Cookie Company Obj - 1
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
13-6 Sales of goods and services to customers Activity Operating revenues Income Statement Cash Accounts Receivable Balance Sheet Cash received from customers Statement of Cash Flows Exhibit 2 Exhibit 2 The Effect of Sales and Services on the Financial Statements Obj - 2
Background image of page 6
13-7 Revenue Recognition Revenue Recognition 1. The selling company has completed most of the activities necessary to produce and sell the goods or services. 2. The selling company has incurred the costs associated with producing and selling the goods or services or can reasonably measure those costs. 3. The selling company can measure objectively the amount of revenue it has earned. 4. The selling company is reasonably sure that it is going to collect cash from the purchaser. Obj - 2
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
13-8 Recognizing Revenue for Recognizing Revenue for Long-Term Contracts Long-Term Contracts Constructo, Inc. contracts to construct a new building for $20 million, and the project will take three years. Constructo, Inc. estimates at the end of the first year, 2007, 20 percent of the work has been completed. For the fiscal period ending in 2007, Constructo, Inc. will recognize revenue of $4 million (20% of $20 million). Obj - 2
Background image of page 8
13-9 Sales Discounts and Returns Sales Discounts and Returns Revenues are reported on the income statement net of discounts and expected returns. A quantity discount is a reduction in the normal sales price to encourage customers to buy large quantities of goods. A sales discount is a reduction in the normal sales price to encourage customers to pay their accounts early. Obj - 2
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
13-10 Sales Discounts and Returns Sales Discounts and Returns Favorite Cookie Company sells goods priced at $5,000 to a customer on November 4, 2007, and offers a 2% discount if the customer pays in full within 10 days of the purchase.
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}