UGBA M3L6 - UGBA M3L6 Break-point for current/long-term...

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UGBA M3L6 Break-point for current/long-term liabilities- 12 months from the date of the balance sheet Par value of a common stock: meaningless Bank of America reported a loss of $2.25 Bn on this quarter’s Income Statement. What effect on the balance sheet? – Retained earnings - profit from previous years which has not been paid out as dividends- go down by $2.25 Bn A company buys a $15,000 espresso machine on Jan. 2 and the fiscal year is Dec. 31. when does the 15000 show up as an expense on the income statement? Not a COGS or CS&A; purchase of equipment in ppe No income statement transaction at this point No balance sheet until depreciated What do you do in year 6? If still working you keep it. Buy share then you buy a piece of one hundred planes. Operating concern 1. Why we need the Statement of cash flows 1. We can’t see if/where dividends were paid, or if and how we raised new money from just the Income St. & Balance Sheet 2. no where on income sheet do we see dividend 3. dividend is taxable 4. how much by selling shares 5. 1. Cash flows from operations- certain amount earned from t-shirts; less cash if we purchase new t-shirts 6. a. + our income 7. b. - building up inventory, more money owed to the firm 8. 2. Investing; money left from cash then pay ppe 9. a. + sale of investments or equipment 10. b. - buying long term PPE 11. 3. Financing 12. a. + Money from stock and bond sales 13. b.- Dividends paid, bonds paid off; bond promise to repay; debt interest in firm; reduce cash to pay bond 14. do not write things from last year; write on year one and two, but it does not take away from cash 15. why is starbucks buying starbucks? Maintain majority ownership; happy because fewer shares are trading 2. Auditing: What it is, why it’s important; enron 1. Without it, we could not have public corporations 2. Public accountants
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3. Regulated licensure by the states
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This note was uploaded on 10/03/2011 for the course UGBA 10 taught by Professor Xuanmingsu during the Fall '08 term at Berkeley.

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UGBA M3L6 - UGBA M3L6 Break-point for current/long-term...

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