A Slice of Life
July 31, 2xxx
Retained Earnings 2,200
Total Liabilities and
It is unlikely that Jason will have an account called ‘accounts receivable’ since
most of his sales will be on a cash basis. If customers purchased pizza and
other food items on credit, then Jason would have an accounts receivable
section on his balance sheet that would represent the amount that he is owed
from his customers.
However, pizza parlours sell products that are relatively inexpensive,
therefore most customers, if not all, will have enough funds to pay for their
purchase in their wallet, which is why it is unlikely that Jason will have an
account called “accounts receivable”.
It may be necessary for him to have an
accounts receivable account if he has customers that purchase frequently
and/or in large quantities, such as a school.
In that case, it would be
appropriate to ship a large order of pizzas along with an invoice.
invoice is paid (by the school for example), the amount owing would be an
All amounts are United States Dollars in Millions
Total revenues in 2009: $13,157.
Total operating expenses in 2009: $8,104.
Depreciation and amortization in 2008: $1,249.
Income tax expense in 2008: $47.
Net income in 2009: $1,790.
Inventories at the beginning of 2009: $315.
Accounts receivable at the end of 2008: $418.
viii. Retained earnings at the end of 2009: $15,770.
Total long-term debt at the end of 2009: $9,097.
Cash flows from operating activities in 2009: $3,342.