LESSON 15-1 Preparing an Income Statement Mr. Hunter 4/23/2017 Chapter 15 Preparing an Income Statement Mr. Hunter

INCOME STATEMENT INFORMATION ON A WORK SHEET page 448

REVENUE SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS page 449 1. Heading 6. Contra account amounts 2. Revenue section 7. Contra account total 3. Title of revenue account 8. Net Sales 4. Sales amount 9. Net sales amount 5. Less contra accounts

COST OF MERCHANDISE SOLD SECTION OF AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS page 450 1. Cost of Merchandise Sold section 2. Beginning inventory 3. Purchases section 4. Total cost of merchandise available for sale 5. Ending inventory 6. Cost of merchandise sold

COMPLETING AN INCOME STATEMENT FOR A MERCHANDISING BUSINESS page 452 1. Gross Profit on Sales 2. Expenses section 3. Net Income before Federal Income Tax 4. Less Federal Income Tax Expense 5. Net Income after Federal Income Tax 6. Double lines 7. Component percentage

LESSON 15-1 Analyzing an Income Statement 4/23/2017 LESSON 15-2 Analyzing an Income Statement

ANALYZING AN INCOME STATEMENT SHOWING A NET LOSS page 457

FINANCIAL RATIOS Earnings per Share Price-Earnings Ratio page 459 Earnings per Share Earnings per Share = Number of Shares Outstanding ÷ Net Income after Federal Income Tax $80,313.95 ÷ 2,500 = $32.13 Price-Earnings Ratio Price-Earnings Ratio = Earnings per Share ÷ Market Price per Share $345.00 ÷ $32.13 = 10.7

LESSON 15-1 Preparing a Statement of Stockholder’s Equity 4/23/2017 LESSON 15-3 Preparing a Statement of Stockholder’s Equity

CAPITAL STOCK SECTION OF THE STATEMENT OF STOCKHOLDERS’ EQUITY page 461 1. Heading 2. Capital Stock and Par Value 3. Stock at the beginning of the year 4. Stock issued during the year 5. Total stock issued at the end of the year

RETAINED EARNINGS SECTION OF THE STATEMENT OF STOCKHOLDERS’ EQUITY page 462 1. Retained Earnings 4. Dividends declared 2. Beginning balance 5. Increase in retained earnings 3. Net income after federal income tax 6. Ending balance 7. Total stockholders’ equity

LESSON 15-1 Preparing a Balance Sheet 4/23/2017 LESSON 15-4 Preparing a Balance Sheet

BALANCE SHEET INFORMATION ON A WORK SHEET page 464

CURRENT ASSETS SECTION OF A BALANCE SHEET page 465 1. Heading 3. Book value of accounts receivable 4. Asset accounts 2. Begin assets section 5. Current assets

PLANT ASSETS SECTION OF A BALANCE SHEET page 466 1. Write the heading Plant Assets. 2. Calculate the book value of office equipment. 3. Use the same procedure to calculate the book value of store equipment. 4. Calculate total plant assets. 5. Calculate total assets.

LIABILITIES SECTION OF A BALANCE SHEET page 467 1. Heading 2. Account title and amount of each current liability 3. Total liabilities

STOCKHOLDERS’ EQUITY SECTION OF A BALANCE SHEET page 468 1. Stockholders’ Equity 5. Total liabilities and stockholders’ equity 2. Capital stock 6. Double rules 3. Retained earnings 4. Total stockholders’ equity

COMPLETED BALANCE SHEET page 469 (continued on next slide)

COMPLETED BALANCE SHEET page 469 (continued from previous slide)

Chapter Schedule April 6 Lecture, Application 15-1 April 8 Application 15-4, 15-5 (counts as your test) (due at 1:50 on April 10)