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Chapter 09

Chapter 09. Financial Statements for merchandizing businesses 商业企业财务报告. Journalize transactions. Post entries to the ledger accounts. The Accounting Cycle. Make end-of-year adjustments. Prepare trial balance. Journalize and post closing entries. Prepare financial statements.

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Chapter 09

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  1. Chapter 09 Financial Statements for merchandizing businesses 商业企业财务报告

  2. Journalize transactions. Post entries to the ledger accounts. The Accounting Cycle Make end-of-year adjustments. Prepare trial balance. Journalize and post closing entries. Prepare financial statements. Prepare adjusted trial balance. Prepare after closing trial balance.

  3. Classified Statements Classified Balance Sheet Classified Income Statement

  4. Classified Income Statement An income statement can be prepared in either a multiple-step or single-step format. The single-step format (单步式) is simpler. The multiple-step format provides more detailed information in which different items of revenue and expense are classified into significant groups.

  5. Proper Heading Revenues & Gains Expenses & Losses Income Statement (Single-Step) Example { { {

  6. Exh. 4.4 Classified (multiple-step)多步式 Income Statement Net Sales Section: Sales - sales Returns and Allowances -Sales Discount = Net Sale Operating Expenses Section: Selling Expense + General and Administrative Expense + Depreciation Expense +Wages Expense ……. =Total Expenses Cost of GOOD Sold Section: Beginning Merchandize Inventory +Net Purchase -Ending Merchandize Inventory =Cost of Good Sold

  7. Income Statement (Multiple-Step) Example Revenue form Sales Cost of Good Sold Operating Expenses

  8. Gross Profit for the year Net sales for the year = *100% Gross Profit Rate 毛利率 Used by investors to evaluate the Profitability with each dollar sale. Gross profit rate

  9. Inventory Turnover Rate存货周转率 Measures how quickly a company sells its merchandise inventory. Avg. Inventory = (Beg. Inv. + End. Inv.) ÷ 2 A ratio that is low compared to competitors suggests inefficient use of assets.

  10. Return On Investment (ROI)投资回报率 Used by investors to evaluate the efficiency with which financial resources are employed. (Beginning Capital +Ending Capital)/2

  11. 13-11

  12. 13-12

  13. Working Capital营运资本 Working capital is the excess of current assets over current liabilities.

  14. This ratio measures the short-term debt-paying ability of the company. Current Ratio Current Assets Current Liabilities = Current Ratio $65,000 $42,000 = Current Ratio 流动比率 = 1.55 : 1

  15. Journalize transactions. Post entries to the ledger accounts. The Accounting Cycle Make end-of-year adjustments. Prepare trial balance. Journalize and post closing entries. Prepare financial statements. Prepare adjusted trial balance. Prepare after closing trial balance.

  16. Special Closing entry for Merchandizing Business Sales Revenue Income Summary closing Bal Dr Cr closing Bal Sales Returns and Allowances Bal closing Sales Discount Bal closing

  17. Special Closing entry for Merchandizing Business Purchases Expenses Income Summary Bal closing Dr Cr Bal closing Purchases Returns and Allowances closing Bal Purchases Discount closing Bal

  18. Assignment: Problem (3) Self comprehensive Problems II on page 237

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