2 7000 7000 3 8000 8000 4 850 850 5 1000 1000 31150 7000 7000 25000 8000 850

2 7000 7000 3 8000 8000 4 850 850 5 1000 1000 31150

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2. +7,000 +7,000 3. +8,000 +8,000 4. -850 -850 5. -1,000 -1,000 $31,150 $7,000 $7,000 $25,000 $8,000 $850 $1,000 + + + = - - $18,050 $18,050 LO 7 > DO IT! Share Capital
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1-35 1. +25,000 +25,000 Trans- action Cash Equipment Accounts Payable Share Capital Retained Earnings Rev. Exp. Div. Assets = Liabilities + Equity + + + = 5. The company paid a dividend of €1,000 in cash to shareholders. 2. +7,000 +7,000 3. +8,000 +8,000 4. -850 -850 5. -1,000 -1,000 €31,150 €7,000 €7,000 €25,000 €8,000 €850 €1,000 + + + = - - €38,150 €38,150 LO 7 > DO IT!
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1-36 Learning Objective 8 Understand the five financial statements and how they are prepared. Companies prepare five financial statements : Statement of Financial Position Income Statement Statement of Cash Flows LO 8 The Basic Accounting Equation Retained Earnings Statement Comprehensive Income Statement
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1-37 LO 8 Illustration 1-10 Financial statements and their interrelationships Illustration 1-11 Financial statements and their interrelationships
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1-38 LO 8 Illustration 1-11
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1-39 LO 8 Balance sheet and income statement are needed to prepare statement of cash flows. Illustration 1-11 Financial statements and their interrelationships
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1-40 Reports the profitability of the company’s operations over a specific period of time. Lists revenues first, followed by expenses. Shows net income (or net loss). Does not include investment and dividend transactions between the shareholders and the business. Income Statement LO 8
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1-41 Reports the changes in retained earnings for a specific period of time. The time period is the same as that covered by the income statement. Information provided indicates the reasons why retained earnings increased or decreased during the period. Retained Earnings Statement LO 8
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1-42 Reports the assets, liabilities, and equity at a specific date. Lists assets at the top, followed by liabilities and equity. Total assets must equal total liabilities and equity. Is a snapshot of the company’s financial condition at a specific moment in time (usually the month-end or year-end). Statement of Financial Position LO 8
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1-43 Information on the cash receipts and payments for a specific period of time. Answers the following: Where did cash come from? What was cash used for? What was the change in the cash balance? Statement of Cash Flows LO 8 HELPFUL HINT Investing activities pertain to investments made by the company, not investments made by the owners.
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1-44 Other comprehensive income items are not part of net income. Reported either by Combining with income statement, or Separate statement. Comprehensive Income Statement LO 8 Illustration 1-13 Comprehensive income statement
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1-45 LO 8 > DO IT! Presented below is selected information related to Flanagan Group plc at December 31, 2017. Flanagan reports financial information monthly. Equipment £10,000 Utilities Expense £ 4,000 Cash 8,000 Accounts Receivable 9,000 Service Revenue 36,000 Salaries and Wages Expense 7,000 Rent Expense 11,000 Notes Payable 16,500 Accounts Payable 2,000 Dividends 5,000 (a) Determine the total assets of Flanagan at December 31, 2017.
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  • Fall '18
  • Mike Leu

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