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Chapter 15

Chapter 15. Preparing an Income Statement Mr. Hunter. INCOME STATEMENT INFORMATION ON A WORK SHEET. page 448. REVENUE SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS. page 449. 1. Heading. 6. Contra account amounts. 2. Revenue section. 7. Contra account total. 8. Net Sales.

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Chapter 15

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  1. Chapter 15 Preparing an Income Statement Mr. Hunter

  2. INCOME STATEMENT INFORMATION ON A WORK SHEET page 448

  3. REVENUE SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS page 449 1. Heading 6. Contra account amounts 2. Revenue section 7. Contra account total 8. Net Sales 3. Title of revenue account 4. Sales amount 9. Net sales amount 5. Less contra accounts

  4. COST OF MERCHANDISE SOLD SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS page 450 1. Cost of Merchandise Sold section 2. Beginning inventory 3. Purchases section 4. Total cost of merchandise available for sale 5. Ending inventory 6. Cost of merchandise sold

  5. COMPLETING AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS page 452 1. Gross Profit on Sales 2. Expenses section 3. Net Income before Federal Income Tax 4. Less Federal Income Tax Expense 5. Net Income after Federal Income Tax 6. Double lines 7. Component percentage

  6. LESSON 15-2 Analyzing an Income Statement

  7. ANALYZING AN INCOME STATEMENT SHOWING A NET LOSS page 457

  8. Market Priceper Share Net Incomeafter FederalIncome Tax ÷ ÷ Earnings perShare Number of SharesOutstanding = = Price-EarningsRatio Earningsper Share FINANCIAL RATIOS page 459 Earnings per Share $80,313.95 ÷ 2,500 = $32.13 Price-Earnings Ratio $345.00 ÷ $32.13 = 10.7

  9. LESSON 15-3 Preparing a Statement of Stockholder’s Equity

  10. CAPITAL STOCK SECTION OF THE STATEMENT OF STOCKHOLDERS’ EQUITY page 461 1. Heading 2. Capital Stock and Par Value 3. Stock at the beginning of the year 4. Stock issued during the year 5. Total stock issued at the end of the year

  11. RETAINED EARNINGS SECTION OF THE STATEMENT OF STOCKHOLDERS’ EQUITY page 462 1. Retained Earnings 4. Dividends declared 2. Beginning balance 5. Increase in retained earnings 3. Net income after federal income tax 6. Ending balance 7. Total stockholders’ equity

  12. LESSON 15-4 Preparing a Balance Sheet

  13. BALANCE SHEET INFORMATION ON A WORK SHEET page 464

  14. CURRENT ASSETS SECTION OF A BALANCE SHEET page 465 1. Heading 3. Book value of accounts receivable 4. Asset accounts 2. Begin assets section 5. Current assets

  15. PLANT ASSETS SECTION OF A BALANCE SHEET page 466 1. Write the heading Plant Assets. 2. Calculate the book value of office equipment. 3. Use the same procedure to calculate the book value of store equipment. 4. Calculate total plant assets. 5. Calculate total assets.

  16. LIABILITIES SECTION OF A BALANCE SHEET page 467 1. Heading 2. Account title and amount of each current liability 3. Total liabilities

  17. STOCKHOLDERS’ EQUITY SECTION OF A BALANCE SHEET page 468 1. Stockholders’ Equity 5. Total liabilities and stockholders’ equity 2. Capital stock 6. Double rules 3. Retained earnings 4. Total stockholders’ equity

  18. COMPLETED BALANCE SHEET page 469 (continued on next slide)

  19. COMPLETED BALANCE SHEET page 469 (continued from previous slide)

  20. Chapter Schedule • April 6 • Lecture, Application 15-1 • April 8 • Application 15-2, 15-3 • April 10 • Application 15-4, 15-5 (counts as your test) (due at 1:50 on April 10)

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