Lecture02 Spring 2009 v2

Lecture02 Spring - Lecture 2 Overview of Financial Statements Balance Sheet OfficeHours TAs Where When Me Where My office(Accounting Department

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Lecture 2 Overview of Financial Statements Balance Sheet
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Office Hours TAs Where? When? Me Where? My office (Accounting Department) When?
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Goal of Today’s Class Understand the four financial statements. Understand which business processes and transactions are reflected in each financial statement. Understand how the four financial statements fit together.
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In The News… Ambac Looks at ‘Alternatives’ After $3.26 Billion Loss (Source: Today’s New York Times) By MICHAEL J. de la MERCED Published: January 23, 2008 The  Ambac Financial Group , one of the largest companies that insures against bond  losses, said Tuesday that it was exploring “strategic alternatives” as it announced a  $3.26 billion loss for its fourth quarter.  Ambac’s shares surged more than 28 percent  on the disclosure that it was in talks with “potential parties.”  In Wall Street’s parlance,  strategic alternatives mean, among other things, a potential sale or outside investment.   Either would help ease concerns that Ambac lacks enough capital to pay claims.  Driving the company’s loss, which amounts to $31.85 a share, was a $5.21 billion  write-down on its portfolio of credit derivatives. About $1.11 billion was tied to  financial instruments backed by subprime mortgages.  The news reflects the continued  woes of Ambac and others in the bond insurance industry.  On Friday, after  abandoning a plan to raise $1 billion in new capital, the company lost its most  valuable asset: a AAA credit rating that allowed it to guarantee lower-rated debt.  That  move by  Fitch Ratings  — and the threat of further downgrades by the other two major  which Ambac lost nearly three-fourths of its market value. Last Wednesday, Ambac  ousted its chief executive and said it would cut its stock dividend by 67 percent.
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Reporting Business Activities Obtain Financing Issue debt and stock Make Investments Purchase land, bldgs, inventory, etc.
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This note was uploaded on 02/02/2012 for the course ACCT 101 taught by Professor Armstrong during the Spring '09 term at UPenn.

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Lecture02 Spring - Lecture 2 Overview of Financial Statements Balance Sheet OfficeHours TAs Where When Me Where My office(Accounting Department

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