Chapter 7. Financial Statements For a Proprietorship. CENTURY 21 ACCOUNTING Thomson/South-Western

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1 Chapter 7 Financial Statements For a Proprietorship CENTURY 21 ACCOUNTING Thomson/South-Western

2 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. CENTURY 21 ACCOUNTING Thomson/South-Western

3 Objectives (con( 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. CENTURY 21 ACCOUNTING Thomson/South-Western

4 LESSON 7-17 Preparing an Income Statement CENTURY 21 ACCOUNTING Thomson/South-Western

5 INCOME STATEMENT INFORMATION ON A WORK SHEET page 182 5

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.

6 6 HEADING OF AN INCOME STATEMENT page 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.

REVENUE, EXPENSES, AND NET INCOME SECTIONS OF AN INCOME STATEMENT page 183 7

titles 5 6 Expense amount Total expenses 8 9 Total of expenses 12 Net Income

7 REVENUE, EXPENSES, AND NET INCOME SECTIONS OF AN INCOME STATEMENT page Single line 7 Revenue Expenses Account title 3 Revenue amount Account titles 5 6 Expense amount Total expenses 8 9 Total of expenses 12 Net Income 14 Double lines 13 Record net income 11 Single line 10 Calculate net income

8 COMPONENT PERCENTAGE ANALYSIS OF AN INCOME STATEMENT page 184 8

Revenue Account titles 1 2 3 Revenue amounts

9 INCOME STATEMENT WITH TWO SOURCES OF REVENUE AND A NET LOSS page Total Revenue Revenue Account titles Revenue amounts 4 Total of revenue Net Loss 6 7 Record Net Loss

10 Application Application Problem 7-1 (p. 194) /Wk4_Chs6_7/Ch-7_Application-Problem- 1_Pg-194 CENTURY 21 ACCOUNTING Thomson/South-Western

11 LESSON 7-27 Balance Sheet Information on a Work Sheet CENTURY 21 ACCOUNTING Thomson/South-Western

12 12 BALANCE SHEET page 187

13 HEADING OF A BALANCE SHEET page 187 2 3 1 1. Center the name of the company on the first line. 2. Center the name of the report on the second line.

13 13 HEADING OF A BALANCE SHEET page 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.

ASSETS AND LIABILITIES SECTIONS OF A BALANCE SHEET page 188 14 Liability amounts 6 Account titles 5 1

14 ASSETS AND LIABILITIES SECTIONS OF A BALANCE SHEET page Liability amounts 6 Account titles 5 1 Assets 4 Liabilities 8 Total Liabilities 2 Account titles 3 Asset amounts Single line 7 Total of liabilities 9

OWNER S S EQUITY SECTION OF A BALANCE SHEET page 189 1 Owner s Equity 4 Single line 2 Account title Capital amount 3 15 Total of

15 OWNER S S EQUITY SECTION OF A BALANCE SHEET page Owner s Equity 4 Single line 2 Account title Capital amount 3 15 Total of assets 6 5 Total Assets 7 Total Liab. and Owner s Eq. Compare totals 9 10 Double lines Total of Liabilities and Owner s Equity 8

OWNER S S EQUITY REPORTED IN DETAIL ON A BALANCE SHEET page 190 16 3 Net Income Current capital amount 8 1 Beginning

16 OWNER S S EQUITY REPORTED IN DETAIL ON A BALANCE SHEET page Net Income Current capital amount 8 1 Beginning capital Difference 6 Beginning capital amount 2 7 Ending capital 5 Single line 4 Drawing 9 Total Liabilities and Owner s Equity

17 Application Application Problem 7-2 (p. 194) carter9/wk4_chs6_7/ch- 7_Application-Problem-2_Pg-194 CENTURY 21 ACCOUNTING Thomson/South-Western

18 18 TERMS REVIEW page 186 stakeholders component percentage

19 19 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/ Quiz Chapter 4 a. Sect. 3A Due 07/03/07 Sect. 5B Due 07/02/07 b. quiz results to Instructor (pcarter9@mccneb.edu) 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.

Journalizing Transactions

LESSON Journalizing Transactions CENTURY ACCOUNTING Thomson/South-Western Objectives:. Define accounting terms related to journalizing transactions.. Identify accounting concepts and practices related