Ch+5+PP+Slides+by+LA+-+Balance+Sheet

Ch+5+PP+Slides+by+LA+-+Balance+Sheet - CHAPTER 5 BALANCE...

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Chapter 5-1 C H A P T E R 5 BALANCE SHEET AND STATEMENT OF CASH FLOWS Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield
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Chapter 5-2 1. Explain the uses and limitations of a balance sheet. 2. Identify the major classifications of the balance sheet. 3. Prepare a classified balance sheet using the report and account formats. 4. Determine which balance sheet information requires supplemental disclosure. 5. Describe the major disclosure techniques for the balance sheet. 6. Indicate the purpose of the statement of cash flows. 7. Identify the content of the statement of cash flows. 8. Prepare a statement of cash flows. 9. Understand the usefulness of the statement of cash flows. Learning Objectives
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Chapter 5-3 Evaluating the capital structure. Assess risk and future cash flows. Analyze the company’s:  Ø Liquidity,  Ø Solvency, and  Ø Financial flexibility. Balance Sheet Usefulness of the Balance Sheet LO 1 Explain the uses and limitations of a balance sheet.
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Chapter 5-4 Most assets and liabilities are reported at historical cost. Use of judgments and estimates. Many items of financial value are omitted. Limitations of the Balance Sheet Balance Sheet LO 1 Explain the uses and limitations of a balance sheet.
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Chapter 5-5 Three General Classifications  Assets, Liabilities, and Stockholders’ Equity Companies further divide these classifications: Classification in the Balance Sheet LO 2 Identify the major classifications of the balance sheet. Balance Sheet Illustration 5-1
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Chapter 5-6 Cash and other assets a company expects to convert into cash, sell, or  consume either in one year or in the operating cycle, whichever is  longer.  Current Assets LO 2 Identify the major classifications of the balance sheet. Balance Sheet Illustration 5-2
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Chapter 5-7 Generally any monies available “on demand.” Cash equivalents  - short-term highly liquid investments that  mature within three months or less. Restrictions or commitments must be disclosed.  Cash Balance Sheet – “Current Assets” Illustration 5-3 LO 2 Identify the major classifications of the balance sheet.
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Chapter 5-8 Portfolios Short-Term Investments LO 2 Identify the major classifications of the balance sheet. Type Valuation Classification Held-to-Maturity Debt Amortized Cost Current or  Noncurrent Trading Debt or Equity Fair Value Current Available-  for-Sale Debt or Equity Fair Value Current or  Noncurrent Balance Sheet – “Current Assets”
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Chapter 5-9 Claims held against customers and others for money, goods, or services. Accounts receivable – oral promises Notes receivable – written promises Major categories of receivables should be shown in the balance sheet or the  related notes.
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Ch+5+PP+Slides+by+LA+-+Balance+Sheet - CHAPTER 5 BALANCE...

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