財(cái)會(huì)課件匯總by2012、412財(cái)務(wù)會(huì)計(jì)316chapter

1、1Chapter 4 The Mechanics of Financial Accounting2Key PointsTwo criteria necessary for economic events to be reflected in the financial statements.The accounting equation and how it relates to the balance sheet, e statement, statement of stockholders equity, and statement of cash flows.Journal entrie

2、s (and T-accounts) and how they express the effect of economic events on the basic accounting equation and the financial statements. Why managers need to understand how economic events affect the financial statements.Why the financial statements are adjusted periodically to reflect certain economic

3、events.3Economic EventsEconomic events reflected in the financial statements must be Relevant events :have economic significance to a company and include any occurrence that affects its financial condition.Objectivity: The dollar values assigned to these events (or the accounts on the financial stat

4、ements) must be determined in an objective manner, most verified by documented evidence.Only a small percentage of relevant events can be reflected on the financial statements.The most relevant information is not always the most objective.4The Fundamental Accounting EquationAssets = Liabilities + St

5、ockholders Equity5The Fundamental Accounting EquationAssets = Liabilities + Contributed Capital + Retained earningsIf the two sides of this equation are unequal, the books do not balance, and an error has been made.However, maintaining this equality does not ensure that the financial statements are

6、correct.6Business Transactions, The Accounting Equation, And The Financial StatementsTransactions and the Accounting EquationTrans. (1):Joe, the owner of the company, contributes $10,000.Trans.(2): $3,000 is borrowed from a bank.Trans.(3):The company purchases equipment for $5,000 cash.Trans.(4): Th

7、e company performs a service for $12,000, $4,000 of it on account.Trans.(5): The company pays $9,000 for expense-wages, interest and maintenance.Trans.(6): Joe pays himself a $1,000 dividend as a return on his original investment.7Business Transactions, The Accounting Equation, And The Financial Sta

8、tementsThe Accounting Equation and the Financial StatementsAccounts and the accounting equation (Figure4-2)8The balance sheet (Figure4-3)Statement of cash flow (Figure4-4) e statement (Figure4-5)Statement of stockholders equity (Figure4-6)Business Transactions, The Accounting Equation, And The Finan

9、cial Statements9The Journal EntryJournal entries provide a more efficient way to represent the effects that economic events affect the accounting equation.e.g, Equipment 5,000 cash 5,000 Purchased equipment for cashTo debit and to creditCompound journal entriesMore than two account involvedThe doubl

10、e entry systemDebit and credit both involvedTotal value of debits equal to total value of credits.10The Journal EntryJournal entries and the accounting equation: Examples (Figure 4-8)1. Company receives $100 cash in payment from a customer on account pany borrows $500 from a bank in exchange for a s

11、hort-term note payable pany pay $300 cash in payment of an account payable4. Company issues common stock $1,000 in exchange for an outstanding note payable pany provides a service for which it bills its clients $2,000 pany pays $500 in salaries to its employees pany declares an $800 dividend to be p

12、aid later to its owners11The Journal EntryAn exampleDemonstrate how financial statements can be prepared from a group of economic events, each of which is represented by a journal entry and the balances are maintained in T-account. Beginning Balance Statements (Figure 4-9); Journal entries and T-acc

13、ounts (Figure 4-10); Ending financial statements (Figure 4-11)Attention: permanent account: the balance statements accountstemporary account and related closing entries: the e statements and dividends accounts 12Recognizing Gains and LossesInvestments and noncurrent assets are often sold for more or

14、 less than the amounts at which they are carried on the balance sheet.In such cases a gain or loss, which is the difference between the proceeds and the carrying amount, must be recognized.Example: P119Investment 71 Cash 71 Acquired North American Field service for cashCash 100 Investment 71 Gain on

15、 sale 29 Sold north American Field Service for gain13Periodic AdjustmentsSome economic events are not evidenced by exchange transactions, however, they should be recorded and are important to a companys performance and financial condition.Periodic adjustments include three formsAccrualsDeferrals and

16、 cost expirationsRevaluation adjustments14AccrualsThe term accrue means to build up gradually.Accruals refer to amounts in asset and liability accounts that build up over time.Adjustments to record accruals are made at the end of an accounting period.Examples include accrued wages (Figure 4-12; Figu

17、re4-13)Dr. Wage expenses Cr. Wage payableDr. Wage payable Cr: Cash15Accrualsaccrued interest accrued interest revenue (Figure 4-14)Dr. Interest Receivable Cr. Interest RevenueDr. Cash Cr. Interest ReceivableAccrued interest expense (Figure 4-15)Dr. Interest Expenses Cr. Interest PayableDr. Interest

18、Payable Cr. Cash16Deferrals (or Cost Expirations)Deferrals are recorded at the end of an accounting period to achieve an appropriate matching of revenues and expenses and do not reflect cash exchanges.Asset capitalization and the matching principleFour-step process (Figure 4-17)17Deferrals (or Cost

19、Expirations)Expense or capitalize example (Figure 4-17)Current expenses (salaries, interest, utilities etc.)Supplies inventory (P.126)Dr. Supplies Inventory Cr. CashDr. Supplies Expense Cr. Supplies InventoryMerchandise inventory (P.126)Dr. Merchandise Inventory Cr. CashDr: Cost of goods sold Cr: Me

20、rchandise InventoryPrepaid expenses (P.127)Dr. prepaid Insurance Cr: CashDr: Insurance Expense Cr: Prepaid Insurance18Deferrals (or Cost Expirations)Unearned revenue (P.127)Dr: Cash Cr: Unearned revenueDr: Unearned revenue Cr: Fees earnedProperty, plant, and equipment (P.128)Dr: Equipment Cr: CashDr

21、: Depreciation Expense Cr: Accumulated DepreciationIntangible assets (P.128)Dr: Patent Cr: CashDr: Amortization Expense Cr: PatentCapitalizing and matching: examplesFigure 4-1819Revaluation AdjustmentsThese are adjustments that do not fall into the categories of accruals or cost expirations.They ser

22、ve to restate certain accounts to keep their reported values in line with existing facts.Examples include the revaluation of:short-term investments accounts receivableinventories20Appendix 4A: Mechanics A Users PerspectiveT-account analysis is employed by many financial statement users to infer econ

23、omic events from the financial statement.Example ( Figure 4A-2)First example ( Figure 4A-1)Infer the decrease of salaries payableSecond example ( Figure 4A-3)Infer the inventory purchasedFinal example ( Figure 4A-4)Infer the accumulated depreciation of sold equipment and its selling price21Review Pr

24、oblemKelly SupplyBeginning Balance Sheet as of December 31, 2005Daily journal entries and T-accountsAdjusting journal entries and T-accounts e Statement for the year ended December 31, 2006Statement of Stockholders Equity for the year ended December 31, 2006Ending Balance Sheet as of December 31, 20

25、06Statement of Cash Flows for the year ended December 31, 200622Kelly SupplyBalance SheetDecember 31, 2005Assets:Cash$12,000 Accounts receivable15,000 Merchandise inventory12,000 Prepaid rent3,000 Machinery$25,000 Less: Accumulated depreciation . 5,000 20,000 Patent. 5,000 Total assets$67,000 23Kell

26、y SupplyBalance SheetDecember 31, 2005Liabilities and Stockholders Equity:Accounts payable$ 8,000Wages payable3,000Interest payable1,000Dividends payable2,000Unearned revenue3,000Short-term notes payable5,000Long-term notes payable10,000Common stock30,000Retained earnings. 5,000Total liabilities and

27、 stockholders equity$67,00024(1)Cash (+A) 10,000Accounts Receivable (+A)15,000Sales (R, +SE)25,000Sold merchandise with a cost of $9,000 for cash and on account.Cash12,00010,000Accounts Receivable15,00015,000Sales25,000Daily Journal Entries and T-accounts25Cost of Goods Sold (E, -SE) 9,000Merchandis

28、e Inventory (-A)9,000Cost of Goods Sold9,000Merchandise Inventory12,0009,000Adjusting Journal Entries and T-accounts26(2)Cash (+A) 8,000Accounts Receivable (+A)8,000Received cash on account.Cash12,00010,0008,000Accounts Receivable15,00015,0008,000Daily Journal Entries and T-accounts27(3)Merchandise

29、Inventory (+A) 10,000Cash (-A)3,000Accounts Payable (+L)7,000Purchased merchandise inventory for cash and on account.Merchandise Inv.12,00010,000Cash 12,00010,0008,0003,000Accounts Payable8,0007,000Daily Journal Entries and T-accounts9,00028(4)Accounts Payable (-L) 10,000Cash (-A)10,000Paid cash on

30、account.Accounts Payable10,0008,0007,000Cash12,00010,0008,0003,00010,000Daily Journal Entries and T-accounts29(5)Wages Payable (-L) 3,000Wages Expense (E, -SE)7,000Cash (-A)10,000Paid accrued wages.Wages Payable3,0003,000Wages Expense 7,000Cash12,00010,0008,0003,00010,00010,000Daily Journal Entries

31、and T-accounts30(6)Interest Payable (-L) 1,000Interest Expense (E, -SE)1,000Cash (-A)2,000Paid accrued interest.Interest Payable1,0001,000Interest Expense 1,000Cash12,00010,0008,0003,00010,00010,0002,000Daily Journal Entries and T-accounts31(7)Short-Term Notes Payable (-L) 2,500Cash (-A)2,500Paid sh

32、ort-term note.S/T Notes Payable2,5005,000Cash12,00010,0008,0003,00010,00010,0002,0002,500Daily Journal Entries and T-accounts32(8) Cash (+A) 10,000Common Stock (+SE) 10,000Issued common stock for cash.Common Stock30,00010,000Cash12,00010,0008,00010,0003,00010,00010,0002,0002,500Daily Journal Entries

33、 and T-accounts33(9)Dividends Payable (-L) 2,000Cash (-A)2,000Paid cash dividend.Dividends Payable2,0002,000Cash12,00010,0008,00010,0003,00010,00010,0002,0002,5002,000Daily Journal Entries and T-accounts34(10)Machinery (+A) 1,000Cash (-A)1,000Acquired machinery for cash.Machinery25,0001,000Cash12,00

34、010,0008,00010,0003,00010,00010,0002,0002,5002,0001,000Daily Journal Entries and T-accounts35(11)Dividends (-SE) 1,000Dividends Payable (+L)1,000Declared dividends.Dividends1,000Dividends Payable2,0002,0001,000Daily Journal Entries and T-accounts36(12)Unearned Revenue (-L) 2,000Sales (R, +SE)2,000Re

35、cognized 2/3 of goods delivered.3,000Unearned Revenue2,000Sales25,0002,000Adjusting Journal Entries and T-accounts37(13)Interest Receivable (+A) 50Interest Revenue (R,+SE)50Recognized accrued interest on savings account.Interest Receivable50Interest Revenue50Adjusting Journal Entries and T-accounts3

36、8(14)Depreciation Expense (E, -SE) 3,000Accumulated Depreciation (-A) 3,000Recognized depreciation on machinery.Depreciation Expense3,000Accumulated Depr.5,0003,000Adjusting Journal Entries and T-accounts39(15)Amortization Expense (E, -SE) 500Patent (-A)500Recognized amortization of patent.Amortizat

37、ion Expense500Patent5,000500Adjusting Journal Entries and T-accounts40(16)Wage Expense (E, -SE) 1,000Wages Payable (+L)1,000Recognized accrued wages.Wage Expense7,0001,000Wages Payable3,0003,0001,000Adjusting Journal Entries and T-accounts41(17)Interest Expense (E, -SE) 2,000Interest Payable (+L)2,0

38、00Recognized accrued interest on long-term note.Interest Expense1,0002,000Interest Payable1,0001,0002,000Adjusting Journal Entries and T-accounts42(18)Rent Expense (E, -SE) 1,000Prepaid Rent (-A)1,000Recognized 1/3 of rent period expired.Rent Expense1,000Prepaid Rent3,0001,000Adjusting Journal Entri

39、es and T-accounts43(19) Sales 27,000 Interest revenue 50 Cost of goods sold 9,000 Wages Expense 8,000 Rent Expense 1,000 Interest Expense 3,000 Depreciation Expense 3,000 Amortization Expense 500 Retained Earnings 2,500To close revenue and expense account to retained earnings.Closing Journal Entries

40、 and T-accountsSales25,002,000027,000 Interest Revenue50050Retained Earnings5,0002,55044Cost of Goods Sold9,00009,000Wage Expense7,0001,00008,000Rent Expense1,00001,000Interest Expense1,0002,00003,000Depreciation Expense3,00003,000Amortization Expense500050045(20) Retained Earnings 1,000 Dividends 1

41、,000To close dividends to retained earnings.Closing Journal Entries and T-accountsRetained Earnings5,0002,5506,5501,000Dividend1,0001,000 046Kelly Supply e StatementFor the Year Ended December 31, 2006Revenues:Sales$27,000Interest revenue50Total revenues$27,050Expenses:Cost of goods sold$ 9,000Wages

42、 expense8,000Rent expense1,000Interest expense3,000Depreciation expense3,000Amortization expense500Total expenses. 24,500Net e$ 2,55047Kelly SupplyStatement of Stockholders EquityFor the Year Ended December 31, 2006 Common Stock Retained Earnings TotalBeginning balance $30,000 $5,000 $35,000Common S

43、tock Issuance 10,000 10,000Plus: Net e 2,550 2,550Less: Dividends (1,000) (1,000) Ending balance $40,000 $6,550 46,550 48Kelly SupplyBalance SheetDecember 31, 2006Assets:Cash$ 9,500 Accounts receivable22,000 Interest receivable50 Merchandise inventory13,000 Prepaid rent2,000 Machinery$26,000 Less: A

44、ccumulated depreciation8,000 18,000 Patent4,500 Total assets$69,050 49Kelly SupplyBalance SheetDecember 31, 2006Liabilities and stockholders equity:Accounts payable$ 5,000Wages payable1,000Interest payable2,000Dividends payable1,000Unearned revenue1,000Short-term notes payable2,500Long-term notes pa

45、yable10,000Common stock40,000Retained earnings6,550Total liabilities and stockholders equity$69,05050Kelly SupplyStatement of Cash FlowsFor the Year Ended December 31, 2006Operating activities:Collections from sales$10,000 Collections of accounts receivable8,000 Payment for inventory purchases(3,000)Payments on accounts payable(10,000)Payments for wages(10,000)Payments for interest. (2,000)Net cash increase (decrease)$(7,000)51Kelly SupplyStatement of Cash FlowsFor the Year Ended December 31, 2006Operating activities:Collections from sales$10,000 Collections of accounts receivable8,000