Transcript How much money did the owners put back into the company?

Accounting
Retained Earnings: $500,000
Net Income – Dividends = Retained Earnings
Revenue – Expenses = Net Income
Why is the time period
on a Balance Sheet
different from the other
financial statements?
The exact date is used
on a Balance Sheet, not
a time period
January 1, 20X1 – December 31, 20X1
January 1, 20X2 – December 31, 20X2
The Balance Sheet
Calculate Earnings Per Share
There are 10,000 shares
Calculate Earnings Per Share
There are 10,000 shares: $75,000/10,000 =$7.50

Cash and any other asset expected to be used up
or converted to cash within the next year.
 Accounts receivable
 Inventory
 Supplies
 Prepaid expenses

Current or long term assets help financial
analysts evaluate a company’s liquidity. Does the
company have enough cash to pay their bills?

Cash and any other asset expected to be used up
or converted to cash within the next year.
 Accounts receivable
 Inventory
 Supplies
 Prepaid expenses

Current or long term assets help financial
analysts evaluate a company’s liquidity. Does the
company have enough cash to pay their bills?

Assets which provide future benefits
extending beyond the next year of a
company's operations.
 Property (land)
 Plant and equipment
 Intangible assets
 Natural resources

Assets which provide future benefits
extending beyond the next year of a
company's operations.
 Property (land)
 Plant and equipment
 Intangible assets
 Natural resources

An item on the balance sheet that includes all
of a company’s obligations due within the
next year.
 Accounts payable
 Wages payable
 Other liabilities

An item on the balance sheet that includes all
of a company’s obligations due within the
next year.
 Accounts payable
 Wages payable
 Other liabilities

A classification on balance sheet representing
a company’s future obligations maturing
beyond its next year of operations.
 Bonds payable
 Notes or loans payable
 Mortgage notes payable

A classification on balance sheet representing
a company’s future obligations maturing
beyond its next year of operations.
 Bonds payable
 Notes or loans payable
 Mortgage notes payable
USE
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If potential investors wished to
clarify how a company had been
financed to date
If an investor wished to find a
company’s earnings per share for
the preceding year
The only financial statement
that directly shows the amount
of dividends paid to a company’s
owners during the year
The reasons for a company’s
success or failure in its
operations over the last year is
best determined by referring to
the company’s
FINANCIAL STATEMENT
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Income statement
Balance Sheet
Statement of retained
earnings
Cash flow statement
USE




If potential investors wished to
clarify how a company had been
financed to date
If an investor wished to find a
company’s earnings per share for
the preceding year
The only financial statement
that directly shows the amount
of dividends paid to a company’s
owners during the year
The reasons for a company’s
success or failure in its
operations over the last year is
best determined by referring to
the company’s
FINANCIAL STATEMENT




Income statement
Balance Sheet
Statement of retained
earnings
Cash flow statement