Professional Documents
Culture Documents
Learning Objectives
Objectives
Balance
Balance Sheet
Sheet and
and
Statement
Statement of
of Cash
Cash Flows
Flows 1. Explain the uses and limitations of a balance sheet.
2. Identify the major classifications of the balance sheet.
3. Prepare a classified balance sheet using the report and
account formats.
Balance
Balance Sheet
Sheet and
and Statement
Statement of
of Cash
Cash Flows
Flows Balance
Balance Sheet
Sheet
Chapter Chapter
5-3 5-4 LO 1 Explain the uses and limitations of a balance sheet.
Balance
Balance Sheet
Sheet Balance
Balance Sheet
Sheet
Illustration 5-
5-1
Balance Sheet
Classification
Chapter Chapter
5-5 LO 1 Understand the uses and limitations of an income statement. 5-6 LO 2 Identify the major classifications of the balance sheet.
Balance
Balance Sheet
Sheet Balance
Balance Sheet
Sheet
Chapter Chapter
5-7 LO 2 Identify the major classifications of the balance sheet. 5-8 LO 8 Explain how to report other comprehensive income.
Balance
Balance Sheet
Sheet –– “Current
“Current Assets”
Assets” Balance
Balance Sheet
Sheet –– “Current
“Current Assets”
Assets”
Chapter Chapter
5-9 LO 2 Identify the major classifications of the balance sheet. 5-10 LO 2 Identify the major classifications of the balance sheet.
Balance
Balance Sheet
Sheet –– “Current
“Current Assets”
Assets” Balance
Balance Sheet
Sheet –– “Current
“Current Assets”
Assets”
Chapter Chapter
5-11 LO 2 Identify the major classifications of the balance sheet. 5-12 LO 2 Identify the major classifications of the balance sheet.
Balance
Balance Sheet
Sheet –– “Current
“Current Assets”
Assets” Balance
Balance Sheet
Sheet –– “Current
“Current Assets”
Assets”
Chapter Chapter
5-13 LO 2 Identify the major classifications of the balance sheet. 5-14 LO 2 Identify the major classifications of the balance sheet.
Balance
Balance Sheet
Sheet –– “Noncurrent
“Noncurrent Assets”
Assets” Balance
Balance Sheet
Sheet –– “Noncurrent
“Noncurrent Assets”
Assets”
Balance Sheet (in thousands)
Long-Term Investments Long-Term Current assets
Investments: Investments:
Invesment in ABC bonds 321,657 Invesment in ABC bonds 321,657
Fixed Assets Investment in UC Inc. 253,980 Special Funds Investment in UC Inc. 253,980
Notes receivable 150,000 Notes receivable 150,000
Land held for Land held for speculation 550,000 Sinking fund Land held for speculation 550,000
Sinking fund 225,000 Sinking fund 225,000
speculation Pensions fund
Pension fund 653,798 Pension fund 653,798
Cash surrender value 84,321
Cash surrender Cash surrender value 84,321
Investment in Uncon. Sub. 457,836 Investment in Uncon. Sub. 457,836
Total investments 2,696,592 value of life Total investments 2,696,592
Property, Plant, and Equip. insurance Property, Plant, and Equip.
Building 1,375,778 Building 1,375,778
Land 975,000 Land 975,000
Chapter Chapter
5-17 LO 2 Identify the major classifications of the balance sheet. 5-18 LO 2 Identify the major classifications of the balance sheet.
Balance
Balance Sheet
Sheet –– “Noncurrent
“Noncurrent Assets”
Assets” Balance
Balance Sheet
Sheet –– “Noncurrent
“Noncurrent Assets”
Assets”
Balance Sheet (in thousands) Balance Sheet (in thousands)
Long-Term Current assets Property, Plant, and Current assets
Balance
Balance Sheet
Sheet –– “Noncurrent
“Noncurrent Assets”
Assets” Balance
Balance Sheet
Sheet
Balance Sheet (in thousands)
Other Assets Current assets Current Liabilities Balance Sheet (in thousands)
Cash $ 285,000 Current liabilities
Notes payable $ 233,450
This section should Intangibles “Obligations that a Accounts payable 131,800
include only unusual Goodwill 2,000,000 company reasonably Accrued compensation 43,000
Unearned revenue 17,000
items sufficiently
Patents 177,000
expects to liquidate Income tax payable 23,400
Trademark 40,000
different from assets Franchises 125,000 either through the use Current maturities LT debt 121,000
Total current liabilities 569,650
in the other Copyright 55,000 of current assets or the
Total intangibles 2,397,000 Long-term liabilities
categories. Other assets
creation of other Long-term debt 979,500
Prepaid pension costs 133,000 current liabilities.” Obligations capital lease 345,800
Deferred income taxes 77,909
Deferred income tax 40,000
Total long-term liabilities 2,093,859
Total other 173,000
Stockholders' equity
Total Assets $ 9,210,978
Chapter Chapter
5-23 LO 2 Identify the major classifications of the balance sheet. 5-24 LO 2 Identify the major classifications of the balance sheet.
Balance
Balance Sheet
Sheet Balance
Balance Sheet
Sheet –– “Exercise”
“Exercise”
BE5-8 Included in Ewing Company’s December 31, 2007, trial
Long-Term Liabilities Balance Sheet (in thousands)
balance are the following accounts: Accounts Payable $240,000;
Current liabilities
Notes payable $ 233,450 Pension Liability $375,000; Discount on Bonds Payable $24,000;
“Obligations that a Accounts payable 131,800 Advances from Customers $41,000; Bonds Payable $400,000;
company does not Accrued compensation 43,000
Wages Payable $27,000; Interest Payable $12,000; Income Taxes
Unearned revenue 17,000
reasonably expect to Income tax payable 23,400
Payable $29,000. Prepare the long-term liabilities section of the
liquidate within the Current maturities LT debt 121,000 balance sheet.
Total current liabilities 569,650
normal operating cycle.” Long-term liabilities
Long-term debt 979,500
All covenants and Obligations capital lease 345,800
Deferred income taxes 77,909
restrictions must be Total long-term liabilities 2,093,859
disclosed. Stockholders' equity
Chapter Chapter
5-25 LO 2 Identify the major classifications of the balance sheet. 5-26 LO 2 Identify the major classifications of the balance sheet.
Balance
Balance Sheet
Sheet Balance
Balance Sheet
Sheet Classification
Classification Exercise
Exercise
Illustration 5-
5-15
(d) Cash dividends payable
(e) Accumulated depreciation
(f) Interest payable
(g) Deficit
(h) Trading securities
(i) Unearned revenue
Chapter Chapter
5-27 LO 2 Identify the major classifications of the balance sheet. 5-28 LO 2 Identify the major classifications of the balance sheet.
Balance
Balance Sheet
Sheet -- Format
Format Additional
Additional Information
Information Reported
Reported
Techniques
Techniques of
of Disclosure
Disclosure The
The Statement
Statement of
of Cash
Cash Flows
Flows
Chapter Chapter
5-31 LO 5 Describe the major disclosure techniques for the balance sheet.
sheet. 5-32 LO 6 Indicate the purpose of the statement of cash flows.
The
The Statement
Statement of
of Cash
Cash Flows
Flows The
The Statement
Statement of
of Cash
Cash Flows
Flows
Chapter Chapter
5-33 LO 6 Indicate the purpose of the statement of cash flows. 5-34 LO 7 Identify the content of the statement of cash flows.
The
The Statement
Statement of
of Cash
Cash Flows
Flows The
The Statement
Statement of
of Cash
Cash Flows
Flows
Balance
Balance Sheet
Sheet Additional
Additional Information
Information Reported
Reported
Chapter Chapter
5-39 LO 8 Prepare a statement of cash flows. 5-40 LO 8 Prepare a statement of cash flows.
Usefulness
Usefulness of
of the
the Statement
Statement of
of Cash
Cash Flows
Flows Usefulness
Usefulness of
of the
the Statement
Statement of
of Cash
Cash Flows
Flows
Chapter Chapter
5-41 LO 9 Understand the usefulness of the statement of cash flows. 5-42 LO 9 Understand the usefulness of the statement of cash flows.
Usefulness
Usefulness of
of the
the Statement
Statement of
of Cash
Cash Flows
Flows Usefulness
Usefulness of
of the
the Statement
Statement of
of Cash
Cash Flows
Flows
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Chapter Chapter
5-45 LO 9 Understand the usefulness of the statement of cash flows. 5-46