Submitted by: Submitted by Huerfano1985
Views: 428
Words: 462
Pages: 2
Category: Business and Industry
Date Submitted: 05/09/2012 09:08 PM
Accounting 300
E1 - 8
Student Name
University of Phoenix
Principles of Accounting ACC/300
March 15, 2012
Professor:
E1-8
The following items and amounts were taken from Linus Inc.’s 2012 income statement and balance sheet. The information is classified with letters that represents assets (A), liabilities (L), stockholder’s equity (SE), revenues (R), and expenses (E).
__A___ | Cash | $ 84,700 |
_SE___ | Retained earnings | 123,192 |
__E___ | Cost of goods sold | 438,458 |
__E___ | Salaries and wages expense | 115,131 |
__A__ | Prepaid insurance | 7,818 |
__A___ | Inventory | $ 64,618 |
__A__ | Accounts receivable | 88,419 |
__R___ | Sales revenue | 584,951 |
__L___ | Income taxes payable | 6,499 |
__L___ | Accounts payable | 49,384 |
__R___ | Service revenue | 4,806 |
__E___ | Interest expense | 1,882 |
Financial Statement Components
Business use financial statements to track the economic, past present, and future of the company. The financial statement is the basic tool to obtain loans, prepare business plans, determine the action plans, and provide general information for investors. The basic financial statements components include the balance sheet, the income statement, and the cash flow statements.
Balance Sheet
The balance sheet contains information reported at a moment in time about resources and assets controlled by the business. The balance sheet also contains information about the business obligations and operating cost. The last part in the balance sheet included the owners equity witch are the net assets who are calculated as Assets – Liabilities = Owners’ Equity.
Income Statement
The income statement in its basic reporting contains information about revenues,
expenses, and net income. Net income is what remains of the revenues after covering the expenses. The income statement provides a general view of the money obtained from the business activity.
Cash flow
The cash flow statement provides...