Millions apple inc condensed statement of

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millions) APPLE INC. Condensed Statement of Stockholders' Equity For Year EndeCl September 25, 2010 Contributed Earned Capital Capital $23,430 Total Balance, September 26, 2009 $ 8,210 ance of common stock. . . . . . . . . . . . . . . 2,458 _ income . :;fiscellaneous . 14,013 (320) $37,123 Balance, September 25, 2010 $10,668 $31,640 2,458 14,013 (320) $47,791 - m prior courses that the usual first step in preparing financial statements is to prepare balance, which is a listing of all accounts and their balances at a point in time. Also, an unadjusted trial balance is one that is prepared prior to accounting adjustments; an _.,,..-_ trial balance is one prepared after accounting adjustments are entered . ...•• 1,,;j~-"'.9 Process . g process refers to the 'zeroing out' of revenue and expense accounts (the temporary ~~rriS) by transferring their ending balances to retained earnings. (Recall, income statement is-revenues and expenses-and the dividend account are temporary accounts because ~ances are zero at the end of each accounting period; balance sheet accounts carryover period to period and are called permanent accounts.) The closing process is typically out via a series of journal entries that successively zero out each revenue and expense t, transferring those balances to retained earnings. The result is that all income state- accounts begin the next period with zero balances. The balance sheet accounts do not o be similarly adjusted because their balances carryover from period to period. Recall scoreboard analogy. Our financial statement effects template makes the closing process unnecessary because the te updates retained earnings with each revenue and expense entry. The arrow that runs from - orne to retained earnings (part of earned capital) highlights the continual updating. It is important to distinguish our financial statement effects template from companies' ting systems. The financial statement effects template and T-accounts are pedagogical - that represent transactions' effects on the four financial statements. The template is highly _:ized but its simplicity is instructive. In practice, managers use journal entries to record transac- and adjustments. The template captures these in summarized fashion. At this point, we have o;;;;..",.rt<1J·Cll,ed and illustrated all aspects of the accounting cycle.
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2-31 Module 2 I Overview of Business Activities and Financial Statements BUSINESS INSIGHT Controlling vs NoncontroIJil11:1 Interest Financial statements are prepared on a consolidated basis. To consolidate a balance sheet, a company includes all the assets and liabilities of subsidiaries under its control. When a company controls a subsidiary, it directs all (100%) of the subsidiary's operations. But control does not mean 100% ownership; control can occur when a company owns the majority of a subsidiary's voting stock. For example, Verizon owns 55% of the voting stock of Verizon Wireless, a sepa- rate legal entity. This 55% gives Verizon voting control and Verizon is said to have a controlling interest in Verizon Wireless. The remaining 45% is owned by Vodafone, a UK telecom; Vodafone has a noncontrolling interest in Verizon Wireless. Now imagine if Verizon wanted to repaint the trucks in the Verizon Wireless fleet. Verizon would
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