Solution_Chpt01 - 8(a(b(c(d The purpose of the income statement is to present information about the revenues expenses and the income of the entity

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
8. (a) The purpose of the income statement is to present information about the revenues, expenses, and the income of the entity for a specified period of time. (b) The purpose of the balance sheet is to report the financial position of an entity at a given date, that is, to report information about the assets, obligations and stockholders’ equity of the entity as of a specific date. (c) The purpose of the statement of cash flows is to present information about the flow of cash into the entity (sources), the flow of cash out of the entity (uses), and the net increase or decrease in cash during the period. (d) The statement of retained earnings reports the way that net income and distribution of dividends affected the retained earnings of the company during the accounting period. 9. The income statement and the statement of cash flows are dated “For the Year Ended December 31, 2008,” because they report the inflows and outflows of resources during a period of time. In contrast, the balance sheet is dated “At December 31, 2008,” because it represents the resources, obligations and stockholders’ equity at a specific date. E1–2. A(1) Accounts receivable A(2) Cash and cash equivalents R(3) Net sales L(4) Notes payable L(5) Taxes payable SE(6) Retained earnings E(7) Cost of products sold E(8) Marketing, administrative, and other operating expenses E(9) Income taxes L (10) Accounts payable A (11) Land A (12) Property, plant and equipment L (13) Long-term debt A (14) Inventories E (15) Interest expense 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
E1–5. Req. 1 READ MORE STORE Balance Sheet At December 31, 2010 ASSETS LIABILITIES Cash $73,350 Accounts payable $12,000 Accounts receivable 39,000 Note payable 3,000 Store and office equipment 72,000 Interest payable 120 Total liabilities $15,120 STOCKHOLDERS’ EQUITY
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/10/2012 for the course ACCT 2301 taught by Professor Li during the Fall '09 term at University of Central Florida.

Page1 / 7

Solution_Chpt01 - 8(a(b(c(d The purpose of the income statement is to present information about the revenues expenses and the income of the entity

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online