Introducing Financial Statements and
E2-27. (20 minutes)
For Year Ended December 31, 2013
Sales revenue .
Cost of goods sold .
Constructing the Statement of
E B-28. (15 minutes)Indirect Method
Add (Deduct) Items to Convert Net Income to Cash Basis
Accounts Receivable Increase
Prepaid Insurance Increase
Accounting Adjustments and
Constructing Financial Statements
The fiscal year is the annual accounting period that a firm adopts. A firm that uses
December 31 as its year-end is on a calendar-year basis. Traditionally, f
Financial Accounting for MBAs
E1-27. (15 minutes)
a. Targets inventories consist of the product lines it carries: clothing, electronics, home
furnishings, food products, and so forth.
b. Targets Property and Equipment assets consist of