ch03-AFM101w2012

C c a ash trade receivables a sales revenue r se

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Unformatted text preview: (c) Nestlé received $345 from customers, including $75 for sales made in December and the rest from January sales. (c) C (+A) ash Trade Receivables (-A) Sales Revenue (+R, +SE) Assets Cash Trade Receivables = Liabilities + +345 -75 Debit 345 C redit 75 270 S hareholders' Equity S ales Revenue (+R, +S E) +270 Equality checks: 1.Debits $345 equal Credits $345, 2.The accounting equation is in balance. Financial Accounting LO 4 3-28 Analyzing Some of Nestlé’s Transactions (d) Nestlé signed contracts with new clients and received $500 cash. The company earned $400 immediately by performing services for these clients; the rest will be earned over the next several months . Debit C redit (d) Assets = Liabilities + S hareholders' Equity Equality checks: 1.Debits $_____ equal Credits $_____, 2.The accounting equation is in balance. Financial Accounting LO 4 3-29 Analyzing Some of Nestlé’s Transactions (e) Nestlé paid $740 in advance for the following: $160 for insurance for the next four months, $450 for rent of warehousing facilities for the next three months, and $130 for advertising in February . Debit C redit (e) Assets = Liabilities + S hareholders' Equity Equality checks: 1.Debits $_____ equal Credits $_____, 2.The accounting equation is in balance. Financial Accounting LO 4 3-30 Analyzing Some of Nestlé’s Transactions (f) Nestlé paid $731 for utilities, repairs, and fuel for delivery vehicles, all considered distribution expenses. Debit C redit (f) Assets = Liabilities + S hareholders' Equity Equality checks: 1.Debits $_____ equal Credits $_____, 2.The accounting equation is in balance. Financial Accounting LO 4 How are Financial Statements Prepared and Analyzed? Income Statement 3-31 Revenues – Expenses = Profit Beginning Equity Statement of + Profit Changes in - Dividends Declared Shareholders’ +/- Other Components Changes, net Equity Ending Equity Statement of Assets = Liabilities + Shareholders’ Equity Financial Share Capital Position Retained Earnings Other Components Statement of Cash Flows Financial Accounting Change = Cash from Operating Activities in + Cash from Investing Activities Cash + Cash from Financing Activities LO 5 How are Financial Statements Prepared and Analyzed? Income Statement 3-32 Revenues – Expenses = Profit Cash Beginning Equity Statement of + Profit Changes in - Dividends Declared Shareholders’ +/- Other Components Changes, net Equity Ending Equity Statement of Assets = Liabilities + Shareholders’ Equity Financial Share Capital Position Retained Earnings Statement of Cash Flows Financial Accounting Other Components Change = Cash from Operating Activities in + Cash from Investing Activities Cash + Cash from Financing Activities LO 5 3-33 Focus on Ca...
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