Matakuliah
Tahun
: V0232 – Akuntansi Keuangan Hotel
: 2009
Hospitality Financial Accounting
Week 5
Financial Statements
6-1 Multi-Step vs. Single-Step Income
Statement
Multiple-step
Sales Revenue
Single-step
Net Sales a
Cost of Goods Sold
Total Revenue
Gross Profit b
Operating Expenses
Total Expenses
Income from
Non-operating items
a
Sales - Sales returns - Sales Discounts
b
Net sales - Cost of goods sold
c
Gross profit - Operating expenses
d
Income from operations + Other revenue/gains - other expenses/losses
Other Revenues and Gains
Net Income d
Other Expenses and Losses
Interest revenue from notes receivable and marketable securities
Interest expense on notes and loans payable
Dividend revenue from investments in capital stock
Casualty losses from recurring causes such as vandalism and accidents
Rent revenue from subleasing a portion of the store
Losses from the sales of abandonment of property, plant, and equipment
Gain from sale of property, plant and equipment
Loss from strikes by employees and suppliers
6-2 Typical Receipts and Payments
Classified by Activity
Operating activities
Cash inflows:
From sale of goods or services.
From returns on loans (interest) and on equity securities (dividends).
Cash outflows:
To suppliers for inventory.
To employees for services.
To government for taxes.
To lenders for interest.
To others for expenses.
Investing activities
Cash inflows:
From sale of property, plant, and equipment.
From sale of debt or equity securities of other entities.
From collection of principal on loans to other entities.
Cash outflows:
To purchase property, plant, and equipment.
To purchase debt or equity securities of other entities.
To make loans to other entities.
Financing activities
Cash inflows:
From sale of equity securities (company’s own stock).
From issuance of debt (bonds and notes).
Cash outflows:
To stockholders as dividends.
To redeem long-term debt or reacquire capital stock.
6-3 Information Sources for Activities
OPERATING ACTIVITIES
Analyze Income statement items
Changes in noncash current asset and current liability items
INVESTING ACTIVITIES
Analyze increases and decreases in investments
and long-term asset items
FINANCING ACTIVITIES
Analyze increases and decreases in long-term
liability and stockholders’ equity items
6-4 Format of the Statement of Cash Flows
COMPANY NAME
Statement of Cash Flows
Period Covered
Cash flows from operating activities
(List of individual items)
Net cash provided (used) by operating activities
XX
Cash flows from investing activities
(List of individual inflows and outflows)
Net cash provided (used) by investing activities
XX
Cash flows from financing activities
(List of individual inflows and outflows)
(Net cash provided (used) by financing activities
XX
XXX
XXX
XXX
Net increase (decrease) in cash
XXX
Cash at beginning of period
XXX
Cash at end of period
XXX
Noncash investing and financing activities
(List of individual noncash transactions)
XXX
6-5 Converting Net Income to Net Cash Provided
(Used) by Operating Activities
Accrual Basis of Accounting
Cash Basis of Accounting
Earned Revenue
Adjust Revenues to Cash Receipts
Net Cash
Provided by
Operating
Activities
Net
Income
Incurred Expenses
Adjust Expenses to Cash
INDIRECT METHOD
1.
2.
Begin with net income and adjust for income
not effect cash.
Reconcile net income to net cash provided
activities.
DIRECT METHOD
OR
1.
2.
Adjust each item on the income statement from
cash basis.
Major classes of operating cash receipts and
reported.
6-6 Operating Activities – Indirect Method
Adjustments for Noncash Items
Adjustments to convert net
income to net cash provided
by operating activities.
Adjustments for noncash
Noncash charges and credits
Add to (Deduct from) Net
Depreciation Expense
Add
Patent amortization expense
Add
Depletion expense
Add
Loss on sale of equipment
Add
Gain on sales of equipment
Deduct
All noncash expenses are added to net income, and all noncash
revenues are subtracted from net income.
6-7 Operating Activities – Indirect Method
Adjustments For Current Assets and Liabilities
Adjustments to convert net income to net
cash provided by operating activities.
Adjustments for
For Changes In:
Add to Net Income
Deduct from Net Income
Current assets
Decreases
Increases
Current liabilities
Increases
Decreases
For Changes in Individual Accounts:
Add to Net Income
Deduct from Net Income
Accounts receivable
Decrease
Increase
Inventory
Decrease
Increase
Prepaid expenses
Decrease
Increase
Accounts payable
Increase
Decrease
Accrued expenses payable
Increase
Decrease
All changes in current assets are handled in a similar manner and all
changes in current liabilities are handled in a similar manner, but the
adjustments are exactly the opposite.
6-8 Cash Flows from Operating Activities –
Indirect Method
DEMONSTRATION COMPANY
Comparative Balance Sheet Accounts
December 31
Current Assets
Problem Data
2003
2002
Change
Accounts receivable
$30,000
$39,000
$9,000 Decrease
Prepaid rent
15,000
10,000
5,000 Increase
Inventory
20,000
18,000
2,000 Increase
Accounts payable
18,000
12,000
6,000 Increase
Interest payable
6,000
2,000
4,000 Increase
Taxes payable
3,000
5,000
2,000 Decrease
Current Liabilities
DEMONSTRATION COMPANY
Income Statement
For the Year Ended December 31, 2008
Revenues
Sales revenue
Gain on sale of land
Total revenues
Expenses
Cost of goods sold
Operating expenses
Depreciation expense
Interest expense
Income tax expense
Total expenses
Net Income
$400,000
20,000
$420,000
280,000
75,000
15,000
8,000
7,000
385,000
$35,000
Using the data
provided, prepare
the cash flows
from operating
activities section of
the statement of
cash flows using
the indirect
method.
6-8 Cash Flows from Operating Activities –
Indirect Method (continued)
DEMONSTRATION COMPANY
Statement of Cash Flows (Indirect Method)
For the Year Ended December 31, 2008
Cash flows from operating activities
Net Income
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense
Gain on sale of land
Decrease in accounts receivable
Increase in prepaid rent
Increase in inventory
Increase in accounts payable
Increase in interest payable
Decrease in taxes payable
Net cash provided by operating activities
$35,000
$15,000
(20,000)
9,000
(5,000)
(2,000)
6,000
4,000
(2,000)
5,000
$40,000