Chapter 7 Financial Statements For a Proprietorship
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Objectives 1.
Define accounting terms related to financial statements for a service business organized as a proprietorship.
2.
Identify accounting concepts and practices related to preparation of financial statements for a service business organized as a proprietorship.
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Objectives (con’t) 3.
Prepare an income statement for a service business organized as a proprietorship and analyze an income statement using component percentages.
4.
Prepare a balance sheet for a service business organized as a proprietorship.
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LESSON 7-1
Preparing an Income Statement
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5
INCOME STATEMENT INFORMATION ON A page 182 WORK SHEET
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LESSON 7-1
6
HEADING OF AN INCOME STATEMENT
page 182
1 2 3
1. Center the name of the company on the first line. 2. Center the name of the report on the second line. 3. Center the date of the report on the third line.
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LESSON 7-1
7
REVENUE, EXPENSES, AND NET INCOME SECTIONS OF AN INCOME STATEMENT page 183 7 Single line Revenue
1
Expenses
4
Account titles
5
Total expenses
8
2 Account title
3
6
Revenue amount
Expense amount
9
Total of expenses
12 Net Income 14 Double lines
11 Single line 13 Record net income 10 Calculate net income
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LESSON 7-1
8
COMPONENT PERCENTAGE ANALYSIS OF AN INCOME STATEMENT
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page 184
LESSON 7-1
9
INCOME STATEMENT WITH TWO SOURCES OF REVENUE AND A NET LOSS 5 Revenue Account titles
Total Revenue
1 2
3
Revenue amounts
4
Net Loss
page 185
Total of revenue
6
7 CENTURY 21 ACCOUNTING © Thomson/South-Western
Record Net Loss LESSON 7-1
Application Application Problem 7-1 (p. 194) http://www.quia.com/files/quia/users/pcarter9 /Wk4_Chs6_7/Ch-7_Application-Problem1_Pg-194
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LESSON 7-2
Balance Sheet Information on a Work Sheet
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12
BALANCE SHEET
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page 187
LESSON 7-1
13
HEADING OF A BALANCE SHEET
page 187
1 2 3
1. Center the name of the company on the first line. 2. Center the name of the report on the second line. 3. Center the date of the report on the third line.
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LESSON 7-1
14
ASSETS AND LIABILITIES SECTIONS OF A BALANCE SHEET
page 188
Liability amounts Account titles
1
4
Assets
8
Total Liabilities
Account titles
3
5
Liabilities
Single line
2
7
Total of liabilities Asset amounts
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6
9 LESSON 7-1
OWNER’S EQUITY SECTION OF A BALANCE SHEET 1
Owner’s Equity
2
Account title
Total of assets
5
4
15
page 189
Single line Capital amount
3
6
7
Total Assets Compare totals
9
Total Liab. and Owner’s Eq.
10 Double lines Total of Liabilities and Owner’s Equity
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8
LESSON 7-1
16
OWNER’S EQUITY REPORTED IN DETAIL page 190 ON A BALANCE SHEET 3 Net Income
Current capital amount
1 Beginning capital
Difference
Beginning capital amount
7 Ending capital 4 Drawing
8
6
2
5 Single line 9
Total Liabilities and Owner’s Equity
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LESSON 7-1
Application Application Problem 7-2 (p. 194) http://www.quia.com/files/quia/users/p carter9/Wk4_Chs6_7/Ch7_Application-Problem-2_Pg-194
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18
TERMS REVIEW
page 186
stakeholders component percentage
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LESSON 7-1
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Homework 1.1 Application Problems
a. Review problems completed in class. b. Use available interactive e-workpapers to complete application problems not worked in class. c. No Chapter 7 application problems are due this week. 1.2 Mastery Problem 7-3 (p. 195) Sect. 3A – Due 07/03/07 Sect. 5B – Due 07/02/07 1.3 Quiz – Chapter 4 a. Sect. 3A – Due 07/03/07 Sect. 5B – Due 07/02/07 b. Email quiz results to Instructor (
[email protected]) and to yourself. 1.4 Exam 2 (Chapters 6 – 8), 100 points, 75 minutes Sect. 3A -- Sat, 07/07/07 Sect. 5B – Sat, 07/05/07 Congratulations ! You have made it through Chapter 7.
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LESSON 7-1
