FINANCIAL STATEMENTS Introduction to Financial StatementsFinancial statements are the official records of a company�s financial performance and business activities over a certain period (Kramer & Johnson, 2009). Financial statements serve stakeholders in different ways. Investors use them to assess a company�s profitability and decide whether or not to invest in it (Kramer & Johnson, 2009). Lenders may also use them to assess whether the business is a going concern and

Balance Sheet Question/Statement: Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. The balance sheet may be applied to everyday life in that it can be used to assess past performance, as well as to plan for future undertakings. If, for example, an individual used one's birthday as the balance sheet statement date, then the balance sheet would show

Balance Sheet Adjustments The updated balance sheet for Module 2 is as follows: Balance Sheet Assets Current Assets Cash Accounts Receivable Inventory Property, Plant, and Equipment Equipment Total Assets Liabilities and Stockholder's Equity Current Liabilities Accounts Payable Long-Term Debt Long-Term Debt Total Liabilities Stockholder's Equity Common Stock Paid In Capital Retained Earnings Total Stockholder's Equity Total Liabilities & Stockholder's Equity Because the customer did not commit to the purchase, the Sales account would have been credited the 45,500 and the inventory account debited 45,500 to correct the original transaction. The computation of the

Accounting Concepts and Practice Income Statement and Balance Sheet Smith Company Income Statement For the Year Ended 31st Dec 2012 Revenue $406,000 Less cost of goods sold $234,000 Gross profit $172,000 Less: Expenses Depreciation expense $24,350 Insurance $1,400 Marketing $4,500 Property taxes $8,900 Rent $18,000 Utilities $6,700 Salaries Total expenses ($131,350) Net Income (Balance C/D) $40,650 Computations Retained Earnings: Difference between debit and credit balances. $760,850 -- $718,000 = $42,850 Retained earnings to be transferred to the balance sheet: Income statement balance b/f balance c/d $40,650 $40,650 Add: retained earnings $42,850 Retained earnings balance c/d $83,500 Smith Company Balance Sheet For the Year Ended 31st Dec 2012 Non-Current Assets Equipment $316,000 Current Assets Accounts receivable $24,500 Cash $30,000 Inventory $25,000 Total current

Income Statement Vertical2011 Vertical 2010 Horizontal Sales Other Revenue Total Less Cost of Goods Sold Operation & Admin Expenses Income Tax Interest Expense Total Net Income Because of economic decline and uncertainties of unemployment, energy prices, etc. 2010 was in over deflation and 2011 had an overall inflation (2011 Annual Report, 2011). Income tax increased in 2011 due to repatriation taxes on dividends from a Canadian subsidiary. Balance Sheet Vertical 2011 Vertical 2010 Horizontal Cash & equivalent Receivables Inventories Prepaid Expenses Total Property' Depreciation & Amortization -71.30% -68.20% Goodwill Invest. Unconsolidated affiliate Other Assets Total Assets Cur. Note Maturities Cur. Cap. Lease

Capital structure decisions can be deliberate as well, yet an analyst without knowledge of the firm's intentions could make an entirely different determination about the validity of the firm's capital structure if based only on the balance sheet. At a minimum, the income statement is also required and in most cases much more information than that is needed to make an accurate assessment of the firm's financial condition (Kennon,