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Z Financial Statements

Financial statements provide structured representations of a company's financial position and results of operations, with the balance sheet outlining resources, obligations, and equity, and the income statement detailing revenues, expenses, and net income. The balance sheet lists current and non-current assets as well as current and non-current liabilities, with equity representing the residual claim on assets. Elements such as assets, liabilities, and equity are considered permanent accounts that exist throughout the life of the company.

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johnvon2023
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45 views

Z Financial Statements

Financial statements provide structured representations of a company's financial position and results of operations, with the balance sheet outlining resources, obligations, and equity, and the income statement detailing revenues, expenses, and net income. The balance sheet lists current and non-current assets as well as current and non-current liabilities, with equity representing the residual claim on assets. Elements such as assets, liabilities, and equity are considered permanent accounts that exist throughout the life of the company.

Uploaded by

johnvon2023
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Financial statements are structured representation of an entity’s financial position which is

balance sheet and results of its operations which is the statement of performance. Financial
statements are products of the accounting process.
STATEMENT OF FINANCIAL POSITION-is a structured financial statement that provides
information about entities’ resources, obligation and owner’s residual claim over its assets, in a
specific time.
The elements of the financial positions are as follows:
1. Assets are resources you control that have resulted from past events and can provide
you with the future economic benefits

2. Liabilities are your present obligations that have resulted from past events and can
require you give up resources when settling them.

3. Equity means assets minus liabilities. Other terms for equity are capital, net assets, and net
worth.
The above elements are termed Permanent Accounts because their life or usefulness continues
throughout the life of the company.

1. CURRENT ASSETS-resources that can be used or realized for current operations for short-
term or within the current operating cycle.
( cash, accounts receivables, Inventories and prepaid expenses. )

2. NON-CURRENT ASSETS- long-lived assets or long-term assets


(Property, Plant and Equipment; Land, Building; Intangible Assets: Patent, Copyright,
Franchise)

3. CURRENT LIABILITIES -obligations of the firm that will mature or need payment during
the current accounting period
(Accounts Payables, accrued expenses, unearned revenues)

4. NON-CURRENT LIABILITIES – all liabilities that will mature or become due beyond one year or
more than a year.
(Loans payable, Mortgage payable, bonds payable)
2,500,000

75,000

25,000
2,000,000

80,000

475,000

205,000
Financial Statements
Prepare a classified income statement for a merchandising firm
COGS Calculation

P
P

P
P

Net Sales
• Sales minus Sales Returns and Allowances and minus Sales Operating Expenses
Discounts
Selling Expenses -Expenses directly connected with
the selling activity, such as salaries of sales staff,
P advertising expenses, and delivery expenses
P
P
General Expenses - Expenses incurred in the
administration of a business, including office
expenses and any expenses that are not
completely classified as Selling Expenses or
Cost of Goods Sold Other Expenses
• A section of the income statement in which the
amount of the cost of the goods sold is calculated Other Income and Other Expenses
• Terms often used to describe the same thing are:
– Cost of merchandise sold Any income or expenses not related to ordinary
– Cost of sales operations (Examples: Interest revenue, Interest
expense)

Classified Income
Statement

Delivered Cost of Purchases

P
P

P
Bay Air Tools
Income Statement
For Year Ended December 31, 20—

Revenue from Sales:


Sales P $ 301,010.00
Less: Sales Returns & Allowances P$ 3,000.00
Sales Discounts 24,300.00 27,300.00
Net Sales P$ 273,710.00
Cost of Goods Sold:
Merchandise Inventory, Jan. 1, 20— $
P 55,500.00
Purchases P$ 215,000.00
Less: Purchases Returns & Allowances P$ 3,450.00
Purchases Discount 2,400.00 5,850.00
Net Purchases P$ 209,150.00
Add Freight In 7,000.00
Delivered Cost of Purchases 216,150.00
Goods Available for Sale P $ 271,650.00
Less Merchandise Inventory, Dec. 31, 20— 53,400.00
Cost of Goods Sold 218,250.00
Gross Profit P 55,460.00
$
Operating Expenses:
Wages Expense $ 28,270.00
Advertising Expense 3,900.00
Rent Expense 8,400.00
Store Supplies Expense 300.00
Insurance Expense 615.00
Depreciation Expense, Store Equipment 6,395.00
Total Operating Expenses 47,880.00
Income from Operations P$ 7,580.00
Other Income:
Investment Income P$ 3,900.00
Other Expenses:
Investment Expenses 250.00 3,650.00
Net Income P$ 11,230.00

P
P

P
P

P
P

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