Chapter 09
Financial Statements for
merchandizing businesses
商业企业财务报告
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1999
The Accounting Cycle
Journalize
transactions.
Post entries to
the ledger
accounts.
Prepare trial
balance.
Prepare after closing Journalize and
post closing
trial
balance.
Irwin/McGraw-Hill
entries.
Make end-ofyear
adjustments.
Prepare
Prepare adjusted
financial
trial balance.
© The McGraw-Hill Companies, Inc., 1999
statements.
Classified Statements
Classified
Financial
Statements
Classified Balance Sheet
Items with certain
characteristics are
grouped together.
Classified Income Statement
Results
in standardized,
meaningful
subtotals.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1999
Classified Income Statement
An income statement can be prepared in either a
multiple-step or single-step format.
The single-step
format (单步式) is simpler.
The multiple-step format provides more
detailed information in which different
items of revenue and expense are
classified into significant groups.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1999
Income Statement (Single-Step) Example
{
Proper Heading
Revenues
& Gains
Expenses
& Losses
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{
{
Central Company
Income Statement
For the Year Ended 12/31/03
Revenues and gains:
income from service
Total revenues and gains
Expenses and losses:
Wages Expense
Selling Expenses
General and Admin. Exp.
Depreciation
Insurance Expense
Total expenses & losses
Net income
$
$
$
785,250
785,250
$
654,150
131,100
351,800
197,350
78,500
17,500
9,000
© The McGraw-Hill Companies, Inc., 1999
Classified (multiple-step)多步式
Income Statement
Exh.
4.4
Net Sales Section:
Sales
- sales Returns and Allowances
-Sales Discount
= Net Sale
Cost of GOOD Sold Section:
Beginning Merchandize Inventory
+Net Purchase
-Ending Merchandize Inventory
=Cost of Good Sold
Irwin/McGraw-Hill
Operating Expenses Section:
Selling Expense
+ General and Administrative
Expense
+ Depreciation Expense
+Wages Expense
…….
=Total Expenses
© The McGraw-Hill Companies, Inc., 1999
Income Statement (Multiple-Step) Example
Income Statement
For the Year Ended 12/31/03
Revenue form
Sales
Cost of
Good
Sold
Operating
Expenses
Irwin/McGraw-Hill
Revenu from sales
sales
527,000
less: Sales returns and Allowandces
5000
Sales Discount
4000 $
(9,000)
Net Sales
518,000
Cost of Good Sold:
Merchandize Inventory Jan.1 2003.
200000
Purchases
357,000
less:Purchases Returns and Allowances
5700
Purchase Discount
3300 $
(9,000)
net purchases:
348000
merchandize available for sale
548000
less:Merchandize Inventory Dec.31 2003.
(250,000)
Cost of Goods Sold
298,000
Gross Profit
220,000
Operating Expense
……
39,395
Total Operating Expense
39,950
© The McGraw-Hill Companies,
Inc., 1999
Net income
$
180,050
Gross Profit Rate
毛利率
Used by investors to evaluate the
Profitability with each dollar sale.
Gross profit
rate
Irwin/McGraw-Hill
=
Gross Profit for the year
*100%
Net sales for the year
© The McGraw-Hill Companies, Inc., 1999
Inventory Turnover Rate
存货周转率
Measures how quickly a company sells its
merchandise inventory.
Merchandise
Turnover
=
Cost of goods sold
Avg. inventory
Avg. Inventory = (Beg. Inv. + End. Inv.) ÷ 2
A ratio that is low compared to competitors
suggests inefficient use of assets.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1999
Return On Investment (ROI)
投资回报率
Used by investors to evaluate the
efficiency with which financial
resources are employed.
ROI
= Net Income ÷
Average
Capital
(Beginning Capital +Ending Capital)/2
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1999
CLOVER CORPORATION
Balance Sheets
December 31,
13-11
Assets
Current assets:
Cash and equivalents
Accounts receivable, net
Merchandize Inventory
Prepaid Insurance
Total current assets
Plant and equipment:
Buildings and equipment, net
Land
Total plant and equipment
Total assets
*Irwin/McGraw-Hill
Percent rounded to first decimal point.
$
$
12,000
60,000
80,000
3,000
155,000
$
$
40,000
120,000
160,000
315,000
© The McGraw-Hill Companies, Inc., 1999
CLOVER CORPORATION
Balance Sheets
December 31,
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
unearned revenue
Total current liabilities
Long-term liabilities:
Mortgages payable
Total liabilities
Owner's equity:
Owner's capital
Total liabilities and shareholders' equity
*Irwin/McGraw-Hill
Percent rounded to first decimal point.
$
13-12
$
67,000
3,000
70,000
$
75,000
145,000
$
$
170,000
315,000
© The McGraw-Hill Companies, Inc., 1999
Working Capital
营运资本
Working capital is the excess of current
assets over current liabilities.
Norton Corporation
Dec. 31, 2001
Current assets
$
Current liabilities
Working capital
Irwin/McGraw-Hill
65,000
(42,000)
$
23,000
© The McGraw-Hill Companies, Inc., 1999
Current Ratio 流动比率
This ratio measures
the short-term debtpaying ability of the
company.
Current
Current Assets
=
Ratio
Current Liabilities
Current
=
Ratio
Irwin/McGraw-Hill
$65,000
$42,000
= 1.55 : 1
© The McGraw-Hill Companies, Inc., 1999
The Accounting Cycle
Journalize
transactions.
Post entries to
the ledger
accounts.
Prepare trial
balance.
Prepare after closing Journalize and
post closing
trial
balance.
Irwin/McGraw-Hill
entries.
Make end-ofyear
adjustments.
Prepare
Prepare adjusted
financial
trial balance.
© The McGraw-Hill Companies, Inc., 1999
statements.
Special Closing entry for
Merchandizing Business
Revenue
Income Summary
Dr
Cr
closing
Bal
Sales
closing
Bal
Sales Returns and Allowances
Bal
closing
Sales Discount
Bal
Irwin/McGraw-Hill
closing
© The McGraw-Hill Companies, Inc., 1999
Special Closing entry for
Merchandizing Business
Expenses
Income Summary
Dr
Cr
Bal
closing
Purchases
Bal
closing
Purchases Returns and Allowances
closing
Bal
Purchases Discount
closing
Irwin/McGraw-Hill
Bal
© The McGraw-Hill Companies, Inc., 1999
Assignment:
Problem (3) Self comprehensive
Problems II on page 237
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1999