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for the Month Ended October 31, 2005
Revenue: Rent Income | ||
Expenses: Advertising Expense Salary Expense | 40000 | |
Total Expenses | 55000 | |
Net Income | ![]() |
If expenses are greater than revenue, the difference (revenue subtracted from expenses) is identified as a net loss. Note that the first money column is used to list more than one item; the second money column is for totals (or a single item) and the results or the business operations for the fiscal period – net income or net loss. Double lines are ruled through both money columns to show a completed statement.
Capital Statement
The next financial statement to be prepared is a capital statement. This shows how owner’s equity has changed during a fiscal period. It starts with the beginning capital account balance. Any changes that occur are then listed. Possible changes in owner’s equity are:
Increases | Decreases | |
1. additional investments 2. net income for period | 1. withdrawals 2. net loss for period |
De Van Loc’s capital statement is a simple one; only two items are involved.
De Van Loc Company
Capital Statement
for the Month Ended October 31, 2005
Beginning Balance, Oct. 1, 2005 | 515 000 | |
Plus: Net Income | 145 000 | |
Ending Balance, Oct. 31, 2005 | ![]() | 660 000 |
Following are illustrations of capital statements with more changes (headings are omitted here):
Beginning Balance, Sept. 1, 2005 | ||
Plus: Additional Investment | ||
Net Income | 250000 | |
Less: Withdrawals | 150 000 | |
Net Increase in Capital | 200 000 | |
![]() | 450 000 |
Another tool for understanding a company's activity is to look at its cash flow. This measures the actual flow of funds - real money – flowing into and out of a company during a given period of time. A company's cash flow factors out all of the accounting tricks and looks at what a company really earned, because it excludes accounting tools such as depreciation.
Task: Prepare a balance sheet for Maria’s Beauty Salon, use the following data:
Assets: Cash $ 1,750
Furniture and Fixures 8,900
Beauty Supplies 600
Liabilities: Regal Laundry 275
Mavelle Corp. 2,500
Дата публикования: 2014-10-25; Прочитано: 812 | Нарушение авторского права страницы | Мы поможем в написании вашей работы!