Module One - Module One Allen Brown Accounting 250...

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Module One Allen Brown Accounting 250 Continuing Cookie Chronicle After investigating the different forms of business organization, Natalie Koebel decides to operate her business as a corporation, Cookie Creations Inc., and she begins the process of getting her business running. While at a trade show, Natalie is introduced to Gerry Richards, operations manager of “Biscuits,” a national food retailer. After much discussion, Gerry asks Natalie to consider being Biscuits’ major supplier of oatmeal chocolate chip cookies. He provides Natalie with the most recent copy of the financial statements of Biscuits. He expects that Natalie will need to supply Biscuits’ Watertown warehouse with approximately 1,500 dozen cookies a week. Natalie is to send Biscuits a monthly invoice, and she will be paid approximately 30 days from the date the invoice is received in Biscuits’ Chicago office. Natalie is thrilled with the offer. However, she has recently read in the newspaper that Biscuits has a reputation for selling cookies and donuts with high amounts of sugar and fat, and as a result, consumer demand for the company’s products has decreased. Instructions Natalie has several questions. Answer the following questions for Natalie. (a) What type of information does each financial statement provide? The different types of statements are; income statement, balance sheet, retained earnings statement, and a statement of cash flow. An income statement measures a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of
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how the business incurs its revenues and expenses through both operating and non-operating activities. It also shows the net profit or loss incurred over a specific accounting period, typically over a fiscal quarter or year. A balance sheet summarizes a company's assets, liabilities and
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This note was uploaded on 04/04/2011 for the course MNG 500 taught by Professor Linkiden during the Spring '11 term at UMass (Amherst).

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Module One - Module One Allen Brown Accounting 250...

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