Kieso_Inter_13e_Ch05

Kieso_Inter_13e_Ch05 - CHAPTER 5 BALANCE SHEET AND...

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Chapter 5-1 C H A P T E R C H A P T E R 5 5 BALANCE SHEET AND STATEMENT OF BALANCE SHEET AND STATEMENT OF CASH FLOWS CASH FLOWS Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield
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Chapter 5-2 Evaluating the capital structure. Assess risk and future cash flows. Analyze the company’s: Liquidity, Solvency, and Financial flexibility. Balance Sheet Balance Sheet Usefulness of the Balance Sheet
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Chapter 5-3 Most assets and liabilities are reported at historical cost. Use of judgments and estimates. Many items of financial value are omitted. Limitations of the Balance Sheet Balance Sheet Balance Sheet
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Chapter 5-4 Three General Classifications Assets, Liabilities, and Stockholders’ Equity Companies further dividetheseclassifications: Classification in the Balance Sheet Balance Sheet Balance Sheet Illustration 5-1
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Chapter 5-5 Cash and other assets a company expects to convert into cash, sell, or consume either in one year or in the operating cycle, whichever is longer. Current Assets Balance Sheet Balance Sheet Illustration 5-2 Illustration 5-2
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Chapter 5-6 Generally any monies available“on demand.” Cash equivalents - short-termhighly liquid investments that maturewithin threemonths or less. Restrictions or commitments must bedisclosed. Cash Balance Sheet – “Current Assets” Balance Sheet – “Current Assets” Illustration 5-3 Illustration 5-3
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Chapter 5-7 Portfolios Short-Term Investments Type Valuation Classification Held-to-Maturity Debt Amortized Cost Current or Noncurrent Trading Debt or Equity Fair Value Current Available- for-Sale Debt or Equity Fair Value Current or Noncurrent Balance Sheet – “Current Assets” Balance Sheet – “Current Assets”
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Chapter 5-8 Claims held against customers and others for money, goods, or services. Accounts receivable– oral promises Notes receivable– written promises Major categories of receivables should beshown in thebalancesheet or the related notes. Receivables Balance Sheet – “Current Assets” Balance Sheet – “Current Assets”
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Chapter 5-9 Accounts Receivable – Presentation Options Current Assets: Current Assets: Cash Cash $ 346 $ 346 Accounts receivable Accounts receivable 500 500 Less allowance for doubtful accounts Less allowance for doubtful accounts 25 25 475 475 Inventory Inventory 812 812 Total current assets Total current assets $1,633 $1,633 Current Assets: Current Assets: Cash Cash $ 346 $ 346 Accounts receivable, Accounts receivable, net of $25 allowance net of $25 allowance 475 475 Inventory Inventory 812 812 Total current assets Total current assets $1,633 $1,633 1 2 Balance Sheet – “Current Assets” Balance Sheet – “Current Assets”
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Chapter 5-10 Inventories Balance Sheet – “Current Assets” Balance Sheet – “Current Assets” Company discloses: Basis of valuation (e.g., lower-of-cost-or-market).
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