1. Tutoring Class1: Basic Knowledge of Financial Accounting
May Chen
March 07,2010

2. Four Topics Topic 1: Accounting information
Topic 2: Balance sheet and Income statement and related accounting concepts
Topic 3: Accounting cycle
Topic 4: Future value and present value

3. ACCOUNTING INFORMATION 会计信息
Topic 1
ACCOUNTING INFORMATION
会计信息
As with most texts, the first chapter will be devoted to an introduction to terms and techniques we will be using in the remaining chapters. For some, this may be your first business courses and the terms will be new. We will be discussing many of the key concepts introduced here in the remaining chapters of the text. 2

4. The accounting process
Accounting “links” decision makers with economic activities ¾ and with the results of their decisions.
Accounting
information
Economic activities
Not all transactions entered into by a business entity are capable of being recorded. Our first task as accountants is to identify those economic events that may be recorded in the accounting system.
Once we have accumulated the necessary economic information in a readable format, decision makers use the information to improve the decision-making process.
Decisions made will impact future economic activities which will find there way into the data accumulation process.
Actions (decisions)
Decision makers 3

5. Types of Accounting Information
Financial 财务
Tax 税收
Managerial 管理
Broadly speaking accounting information can be placed into one of three categories. The first in financial accounting information that is primarily used by external parties. Managerial accounting information is used by persons within the organization to help manage and control business processes. Tax information is used to help organizations complete obligations to report to the Internal Revenue Service and other regulatory agencies. 3

6. Three Primary Financial Statements
Income Statement
Balance Sheet
Statement of Cash Flows
资产负债表
利润表
现金流量表
There are three basic financial statements that we will study in this course. These three include the balance sheet, income statement, and statement of cash flows. The balance sheet is often referred to as the statement of financial position because it shows the resources of a business and the claims against those resources. The income statement is often referred to a the statement of operations. This financial statement measures the revenues earning by a company during a period of time and the expenses incurred to generate those revenues. The statement of cash flows provides information about where the company got its cash and where it spend its cash during a period of time.

7. External Users of Accounting Information
Owners
Creditors
Labor unions
Governmental agencies
Suppliers
Customers
Trade associations
General public
Here is a comprehensive list of external users of financial accounting information. 3

8. Users of Internal Accounting Information
Board of directors
Chief executive officer (CEO)
Chief financial officer (CFO)
Vice presidents
Business unit managers
Plant managers
Store managers
Line supervisors
Managers of the business need information to help direct and control operations of a business. The sales or marketing department need information about customers and products. Officers of the company need information to develop strategic plans. 3

9. Balance sheet and income statement and related accounting concepts
Topic 2
Balance sheet and income statement and related accounting concepts
In chapter two we will discuss in detail the content and preparation of the three basic financial statements prepared by accountants. 2

10. Balance Sheet 资产负债表
Income Statement
Balance Sheet
Statement of Cash Flows
It is a snapshot of a business’ financial condition at a specific moment in time.
反映企业某一特定时点的财务状况
The balance sheet describes the financial position of the company at a specific point in time. We may prepare a balance sheet monthly, quarterly, or annually depending on the needs of management and external users.

11. Balance Sheet 资产负债表
ABC Corporation
Balance Sheet
June 30, 20xx
Assets
Current Assets流动资产
Noncurrent Assets非流动资产
Total Assets总资产 $ xxx
Liabilities and Equity负债与股东权益
Current Liabilities 流动负债
Long-Term Liabilities长期负债
Stockholders’ Equity
Contributed Capital 股本
Retained Earnings 留存收益
Total Stockholders’ Equity
Total Liabilities + Stockholders’ Equity负债与股东权益 $ xxx
中国《企业会计准则第30号—财务报表列报》应用指南：“Financial Statements Presentation. PDF” P3

12. Assets = Liabilities + Owners’ Equity
Related Concepts
The Accounting Equation 会计平衡式
Assets = Liabilities + Owners’ Equity
资产 负债 所有者权益
Assets are economic resources that are owned by the business and are expected to provide positive future cash flows.
Current assets and non-current assets
流动资产与非流动资产
Historical Cost Principle 历史成本原则

13. Related Concepts
Liabilities（负债） are debts that represent negative future cash flows for the enterprise.
Current liabilities and long-term liabilities
流动负债与长期负债
Owners’ equity（所有者权益） represents the owners’ claims to the assets of the business. （Stockholders’ Equity 股东权益）
Owner’s investment and business earning
Payments to owners and business loss
Owners’ Investments
Business Earnings

14. Depicts the revenue and expenses for a designated period of time.
Income Statement 利润表
Income Statement
Balance Sheet
Statement of Cash Flows
Depicts the revenue and expenses for a designated period of time.
反映企业一定期间的收入与费用
Net income is defined as the excess of revenues over expenses. Financial statements have a three-line title with the company name, the name of the statement, and the period covered by the report. The income statement lists revenues and expenses that were incurred over a period of time. Most companies prepare monthly income statements.

15. For the period ending June 30, 20xx
Income Statement
ABC Corporation
Income Statement
For the period ending June 30, 20xx
Net revenues ………… $xx,xxx
Cost of Goods Sold …… (x,xxx)
Gross Profit xx,xxx
Operating expenses:
Research & Development x,xxx
Selling expenses …… x,xxx
General & Admin. … x,xxx
Total Operating Expenses (xx,xxx)
Income from Operations xx,xxx
Other revenues & expenses (x,xxx)
Income before taxes x,xxx
Income tax expense (x,xxx)
Net Income $ x,xxx
Earnings per share $x.xx*
*EPS =
Net Income After Taxes /Common Shares Outstanding
中国《企业会计准则第30号—财务报表列报》应用指南：“financial statements presentation. PDF” P4

16. Related Concepts The Accounting Equation Revenue Expense
Net income= Revenue –Expense
净利润=收入-费用
Revenue
The price for goods sold and services rendered during a given accounting period.
Increases owner’s equity
Expense
The costs of goods and services used up in the process of earning revenue.
Decrease owner’s equity
Cash VS. Accrual Basis Accounting

17. Cash Basis Accounting 现金制会计
Under the cash basis accounting, revenues and expenses are recognized as follows:
Revenue is recognized when cash is received.
Expense is recognized when cash is paid.

18. Accrual Basis Accounting 权责发生制
Under the accrual basis accounting, revenues and expenses are recognized as follows:
Revenue realization principle 收入实现原则(Revenue is recognized when it is realized or earned )
Matching principle 配比原则
（Expense is recognized in the period in which related revenue is recognized ）

19. Relationships Among Financial Statements
Three accounting equations
Net income= Revenue –Expense
Ending R/E=Beginning R/E + NI –Dividends
Assets = Liabilities + Owners’ Equity

20. Relationships Among Financial Statements
Date at beginning of period
Date at end of period
Time
Balance Sheet
Balance Sheet
All the financial statements are interrelated. We can start with the balance sheet at the beginning of an accounting period, analyze the income and cash flows of the company and arrive at the ending balances that will appear on the balance sheet. Let’s see how this works in our example of JJ’s Lawn Care.
Income Statement
Statement of Cash Flows 3

21. Relationships Among Financial Statements
Part I
Here is our balance sheet for JJ’s Lawn Care at the end of May.
Part II Our net income impacts the retained earnings of the company. Part III
The statement of cash flows not only provides us with the balance in the cash account, but also details information about the acquisition and disposition of assets and liabilities as well as changes in the owners’ equity balance. You can clearly see how all the financial statements articulate with each other. 3

22. ACCOUNTING CYCLE 会计循环 Topic 3
In Chapter 3 we will discuss the methods used by accountants to record business transactions in the general journal and post the information into a company’s general ledger. This is an expansion of what we studied in Chapter 2. We will be looking at many of the same transactions for JJ’s Lawn Care Company in following proper accounting procedures to record and post the transactions. 2

23. The Accounting Cycle 4 Prepare adjusting entries. 编制调整分录
1 Journalize transactions.
编制会计分录
3 Prepare trial balance.
编制试算平衡表
2 Post entries to the ledger accounts.过账
This is a detailed schematic of the accounting cycle. We start with recording transactions in the journal and end with the financial statements. At the end of each period we close the books and get ready for the next accounting period. In the next chapter we will continue to expand the accounting process to include all of the steps listed in this schematic.
7 Journalize and post closing entries.编制结账分录并过账
6 Prepare financial statements.编制财务报表
5 Prepare adjusted trial balance.编制调整后试算平衡表
8 Prepare after-closing trial balance.编制结帐后试算平衡表 3

24. Accounts （帐户）are individual records showing increases and decreases.
The Ledger 分类账
Accounts （帐户）are individual records showing increases and decreases.
Cash
Accounts Payable
The entire group of accounts is kept together in an accounting record called a ledger.
Capital Stock
An account is an individual record showing increases and decreases in the balance. Think of your checkbook as an account. You maintain, in chronological order, cash receipts and disbursements as well as the current account balance.
The entire group of accounts for a particular business is called the ledger.

25. The Use of Accounts
Increases are recorded on one side of the T-account
（T字型帐户）, and decreases are recorded on the other side.
Left or Debit Side
Right or Credit Side
Title of the Account
Accountants often use a tee-account to represent a general ledger account. It is a quick way to analyze transactions before entering information in the journal. The left side of a tee-account is always called the debit side, and the right side is always called the credit side. This terminology comes from the time when the double-entry system was first developed. We still use the terms as a matter of convention. The words do not have any significant meaning other than they stand for the left and right side of a ledger account. Increases and decreases in an account balance are handled differently, depending upon the nature of the account.

26. Double Entry Accounting: The Equality of Debits and Credits 复式记帐法
A = L + OE =
Debit balances
Credit balances
In the double-entry accounting system, every transaction is recorded by equal dollar amounts of debits and credits.
Accounts use the double-entry accounting system. This means that all transactions will have an equal dollar amount of debits and credits. 13

27. Debit and Credit Rules（借贷规则）
Debits and credits affect accounts as follows:
A = L + OE
ASSETS
Debit for Increase
Credit for Decrease
LIABILITIES
Debit for Decrease
Credit for Increase
EQUITIES
Debit for Decrease
Credit for Increase
After we decide on the terms to use for the left and right side of a ledger account, we must establish the mathematics of the double-entry system. Liabilities and Equity have the opposite sign of Assets. If we were to move the liabilities to the left side of the equation, it would read assets minus liabilities equal equity. As a convention of double-entry accounting, we have decided that a debit, or left side, of an asset account will represent an increase in the asset account balance. Once this decision is made all the remaining math is determined. Because Liabilities and Equity have the opposite sign of Assets, a debit to a liability or equity account must mean a decrease and a credit means an increase. Instead of using the terms increase and decrease we use the terms debit and credit. It is important to remember whether we are talking about an asset, liability or equity account for the meaning of a debit or a credit.
It will take you a short while to become accustomed to using the terms debit and credit, but with practice you will easily master the concept. 13

28. Debits and Credits for Revenue and Expense
Expenses decrease owner’s equity.
Revenues increase owner’s equity.
EQUITIES
Debit for Decrease
Credit for Increase
EXPENSES
Credit for Decrease
Debit for Increase
REVENUES
Debit for Decrease
Credit for Increase
Part I Let’s look more closely at the recording of revenues and expenses. We know that revenues increase owners’ equity and expenses decrease owners’ equity. Part II We show a decrease in owners’ equity with a debit. So we must record increases in expenses with a debit in a separate ledger account. Part III We show an increase in owners’ equity with a credit. So we must record increases in revenues with a credit in a separate ledger account.

29. Investments by and Payments to Owners
Payments to owners decrease owners’ equity.
Owners’ investments increase owners’ equity.
EQUITIES
Debit for Decrease
Credit for Increase
DIVIDENDS
Credit for Decrease
Debit for Increase
CAPITAL STOCK
Debit for Decrease
Credit for Increase
Part I We know that payment to owners decrease owners’ equity and investments by owners’ increase owners’ equity. Part II Dividends represent payments to owners of a corporation. So an increase in the dividend account must be shown with a debit. Part II Capital stock represents investments by owners of a corporation. So an increase in the capital stock account must be shown with a credit.

30. Debit and Credit Entries（借贷分录）
Receipts are on the debit side.
Payments are on the credit side.
The balance is the difference between the debit and credit entries in the account.
Part I Here are the dates and amounts of transactions that impacted the cash account of JJ’s Lawn Service for the month of May. Part II We will place all receipts, or increases, on the debit, or left side of the ledger account. Part III If we place increases on the left side of the account, we must show all payments, or decreases, on the right, or credit side of the account. We have now established the basic accounting rules for assets. Cash is an asset and we show increases in assets on the left, or debit, side, and decreases on the credit, or right, side. Part IV The balance in any account is the difference between total debits and credits. The balance is placed on the side with the greater dollar amount.

31. Step 1: Journalize the Transaction编制会计分录
In an actual accounting system, transactions are initially recorded in the journal.
Transactions are initially recorded in the journal rather than the ledger account. The journal records transactions in chronological order. The ledger groups together all transactions that impact a particular account. When preparing a journal entry we always list our debit accounts and amounts first and show credit accounts and amounts below the debits, indented slightly. Proper form requires that each journal entry be followed by a short description of the transaction. We skip a line after the description of the transaction before we start our next journal entry. 4

32. Step2 :Posting Journal Entries to the Ledger Accounts 过账
Part I
Here we have the journal entry. Let’s see how we post the information from the journal to the ledger. Part II First, we find the proper ledger account. In this case, we locate the cash ledger account. Part II Next, we copy the date to the ledger account. Part IV Finally, we copy the amount from the debit column in the journal to the debit column in the ledger. We update the balance in the cash account. As you can see the current balance is eight thousand dollars. Now, let’s post the credit side of the journal entry. 4

33. Posting Journal Entries to the Ledger Accounts
Part I First, locate the capital stock account in the general ledger. Part II Next, copy the date from the journal entry to the proper column in the capital stock account. Part II Finally, copy the amount from the credit column in the journal to the credit column in the ledger. We update the account balance for the new posting. 4

34. Cash increases $750 with a debit.
May 29: JJ’s provided lawn care services for a client and received $750 in cash.
Cash increases $750 with a debit.
Sales Revenue increases $750 with a credit.
The asset account cash, increased by seven hundred fifty dollars. We show an increase in an asset account on the debit, or left, side of the account. The revenue account, sales revenue, increased by seven hundred fifty dollars. We show increases in a revenue account with a credit. So, we place the amount on the credit, or right, side of the account. How did you do? 3

35. Proves equality of debits and credits.
Step 3: Prepare Trial Balance 编制试算平衡表
Proves equality of debits and credits.
A trial balance lists the balance in all accounts in the ledger. We know that all transactions have a equal debit and credit impact. The total debit balance accounts should be equal to the total credit balance accounts if we followed the rules of double-entry bookkeeping. As you can see the total of the debit balance accounts is twenty one thousand nine hundred dollars. This is exactly equal to the total of the credit balance accounts. So, our books are in balance. 4

36. Step 4: Prepare Adjusting Entries 编制调整分录
Adjusting entries are
Every adjusting
needed whenever revenue or expenses affect more than one
entry involves a change in either a revenue or expense
accounting period.
and an asset or liability.
The accrual basis dictates that revenues be recognized when earned and expenses be recognized when incurred. The accrual basis of accounting is considered to be in compliance with generally accepted accounting principles, gap.
Every adjusting entry we make will involve a revenue or expense and an asset or liability. 4

37. Types of Adjusting Entries
Converting assets to expenses
Converting liabilities to revenue
Accruing unpaid expenses
Accruing uncollected revenues
There are two broad categories of adjustments.
The first is when we pay or receive cash before the expense or revenue is recognized. This category includes prepaid or deferred expenses (including depreciation), and unearned or deferred revenues.
The second major category of adjustments is when cash is paid or received after the expense or revenue is recognized. These are very common adjustments. The category includes accrued expenses and accrued revenues. 4

38. Converting Assets to Expenses
End of Current Period
Prior Periods
Current Period
Future Periods
Adjusting Entry
Recognizes portion of asset consumed as expense, and
Reduces balance of asset account.
Transaction
Paid cash in advance of incurring expense
(creates an asset).
Part I When we have an adjusting entry to convert an asset to expense, a transaction took place in a prior period that involved the advance payment of an expense.
Part II The adjusting entry is made at the end of the current period to recognize the converting of the prepaid asset into an expense. The asset account is reduced and the expense account is increased. 4

39. The Concept of Depreciation (折旧)
The portion of an asset’s utility that is used up must be expensed in the period used.
Fixed Asset (debit)
The asset’s usefulness is partially consumed during the period.
Depreciation Expense (debit)
On date when initial payment is made . . .
At end of period . . .
As we use a depreciable asset to produce revenue, that asset loses some of its utility. We are consuming part of the asset as we use it. At the end of the accounting period you need to record the expense relating to the consumption of the depreciation asset.
Accumulated Depreciation (credit)
Cash (credit)

40. Depreciation Is Only an Estimate
On May 2, 2005, JJ’s Lawn Care Service purchased a lawn mower with a useful life of 50 months for $2,500 cash.
Using the straight-line method（直线法）, calculate the monthly depreciation expense.
Depreciation
expense (per
period) =
Cost of the asset
Estimated useful life
Part I
On May 2nd JJ’s Lawn Care Service purchased a lawn mower with a useful life of fifty months. The lawn mower cost twenty-five hundred dollars. JJ’s Lawn Care uses the straight-line method of depreciation and records depreciation expense monthly.
Part II
Depreciation expense is equal to the cost less any anticipated salvage value divided by the estimated useful life. Part III So, JJ’s Lawn Care should record depreciation expense of fifty dollars per month. Let’s look at the adjusting entry required.
$2,500 50 =
$50

41. Depreciation Is Only an Estimate
JJ’s Lawn Care Service would make the following adjusting entry.
The adjusting journal entry required on May 31st is to debit, or increase, Depreciation Expense dash Equipment and credit, or increase, the contra account Accumulated Depreciation dash Equipment for fifty dollars.
A contra account is a reduction in an associated account. In this case, Accumulated Depreciation will be shown on the balance sheet as a reduction in the Equipment account.
Contra-asset 4

42. Accumulated depreciation would appear on the balance sheet as follows:
Here is how JJ’s Lawn Care will show its plant assets. Notice that the contra accounts are subtracted from the related asset account. 4

43. Step 5: Adjusted Trial Balance
All balances are taken from the ledger accounts on May 31 after preparing the two depreciation adjusting entries.
We have highlighted just a few of the adjusting entries we prepared at the end of May Like the trial balance, the adjusted trial balance shows that the total of the debit balance accounts is equal to the total of the credit balance accounts. Our books are in balance after we recorded our adjusting entries. 4

44. Net income also appears on the Statement of Retained Earnings.
Step 6: Prepare Financial Statements
Here is JJ’s Income Statement for the month ended May 31st, JJ’s produced net income of four hundred dollars. Revenues total seven hundred fifty dollars. Expenses include gasoline expense and depreciation on the company’s equipment and truck. Once we complete the income statement, we can prepare the statement of retained earnings. Net income is an integral part of the statement of retained earnings.
Net income also appears on the Statement of Retained Earnings. 4

45. Now, let’s prepare the Balance Sheet.
JJ’s Lawn Care was started in May, so the beginning balance in retained earnings was zero. We add net income of four hundred dollars to the beginning balance of zero and subtract the dividends paid of two hundred dollars to arrive at the ending retained earnings balance of two hundred dollars. Retained earnings at May 31st will appear on the balance sheet of JJ’s Lawn Care.
Now, let’s prepare the Balance Sheet. 4

46. Next, let’s prepare the Statement of Cash Flows for JJ’s Lawn Care Service for May.
You can see the two hundred dollar balance in Retained Earnings toward the bottom of the balance sheet. The contra accounts, Accumulated Depreciation dash tools and equipment and Accumulated Depreciation dash Truck, reduce the balance in the related asset accounts. Now we can prepare the Statement of Cash Flows for JJ’s Lawn Care. 4

47. First, we see cash flows from operating activities.
At this stage in our course it is important to note that the Statement of Cash Flows is divided into three major sections.
First, we see cash flows from operating activities.
Next, we have cash flows from investing activities.
Finally, we have cash flows from financing activities. Dividend appears in the cash flows from financing activities as a cash outflow. The last part of the statement reconciles the beginning and ending cash balances. 4

48. Step 7: Closing the Temporary Equity Accounts
The closing process gets the temporary accounts ready for the next accounting period.
Close Revenue accounts to Income Summary.
Close Expense accounts to Income Summary.
Close Income Summary account to Retained Earnings.
Close Dividends to Retained Earnings.
Once the financial statements have been prepared, we must close the books and get ready for the next accounting period. Net income is earned over a period of time. At the start of a new period we want all revenue and expense accounts to have a zero balance so we can start recording income in this period. The closing of a company’s books is a four step process. Step one is to close all revenue accounts to a temporary account called Income Summary. Step two is to close all expense accounts to the Income Summary account. At this point, we have isolated net income in the Income Summary. Step three is to then close the Income Summary to Retained Earnings. We transfer net income from the Income Summary to Retained Earnings and zero out the Income Summary. The Income Summary account never appears in the financial statements. The forth and final step is to close the Dividends to Retained earnings. We now have net income added to Retained Earnings and Dividends subtracted from Retained Earnings. We have updated Retained Earnings. Let’s prepare the closing entries for JJ’s Lawn Care. 4

49. Closing the Temporary Equity Accounts
Let’s prepare the closing entries for JJ’s Lawn Care Service.
From the adjusted trial balance we have highlighted all of the accounts that must be closed. We will close dividends, sales revenue and the three expense accounts highlighted. When we complete the closing process, the Retained Earnings account will have the proper balance. Notice that there is no Retained Earnings account because the company was started in May. Let’s get started by closing Sales Revenue. 4

50. Closing Entries for Revenue Accounts
Notice that the balance in the Sales Revenue account is zero. We can now start accumulating revenue for the next accounting period, the month of June. The Income Summary has a credit balance of seven hundred fifty dollars. So the total revenues have been transferred to the credit side of the Income Summary.
Now, let’s close the three expenses.

51. Closing Entries for Expense Accounts
Each expense account has a zero balance. We can begin to record expenses incurred during the month of June. The Income Summary is debited for three hundred fifty dollars and has a credit balance of four hundred dollars. This four hundred dollars represents income for the month of May. Next, we need to transfer net income from the Income Summary to Retained Earnings.
Net Income

52. Closing the Income Summary Account
The Income Summary now has a zero balance and net income appears on the credit side of Retained Earnings. Remember, credits to Retained Earnings increase the account balance. The final closing entry deals with Dividends.
The balance in Income Summary is now zero.

53. Closing the Dividends Account
The Dividends account has a zero balance after we make the closing entry. Retained Earnings now has a credit balance of two hundred dollars. This is the amount that appears on the balance sheet for JJ’s Lawn Care.

54. Prepare after-closing trial balance
Step 8:
Prepare after-closing trial balance
After preparing all the closing entries, we draft an after-closing trial balance.
The after-closing trial balance shows we have no revenues, expenses or dividends. You can see that the proper balance of Retained Earnings appears on the after-closing trial balance. If there are any revenues, expenses or dividends on the after-closing trial balance. an error has been made. We must go back and review our closing entries. 4

55. FUTURE VALUE AND PRESENT VALUE 终值与现值
Topic 4
FUTURE VALUE AND PRESENT VALUE
终值与现值
In Chapter 3 we will discuss the methods used by accountants to record business transactions in the general journal and post the information into a company’s general ledger. This is an expansion of what we studied in Chapter 2. We will be looking at many of the same transactions for JJ’s Lawn Care Company in following proper accounting procedures to record and post the transactions. 2

56. Future Value Future value of $1 1元终值
Future value of an annuity of 1$ in arrears
1元后付年金（又叫普通年金）的终值
future value of a stream of equal payments made at the end of each compounding period.

57. Future Value of $1 1元终值
To what future value will $1 grow over a specified period of time?

58. Future Value of $1 1元终值
How much will I receive at the end of 3 years if I invest a single sum of $50 today at 8% interest compounded annually?
Method one: using formula

59. Future Value of $1 1元终值 Method two: looking up future value table P687
50*1.260=63

60. Future Value of an Annuity of $1 in Arrears 1元后付年金的终值

61. Future Value of an Annuity of $1 in Arrears
What is the accumulated value of a $25 payment to be made at the end of each of the next three years if the prevailing rate of interest is 9% compounded annually?
Method one: using formula

62. Future Value of an Annuity of $1 in Arrears

63. Future Value of an Annuity of $1 in Arrears
Method two: looking up future value table P688
i=9%; n=3;
25* 3.278=81.95

64. Present Value 现值 Present value of $1
Present value of an annuity of $1 in arrears

65. Present Value of $1 1元现值
What is the present value of $1 to be paid at a specified time in the future?

66. Present Value of $1
What is the current value of a $100 lump sum to be paid in 2 years if the prevailing interest rate is 5% compounded annually?

67. Present Value of $1 Or look up present value table P689 i=5% n=2
100*0.907=90.70

68. Present Value of an Annuity of $1 in Arrears 1元后付年金现值
What is the present value of a stream of payments?

69. Present Value of an Annuity of $1 in Arrears
What is the current value of a $50 payment to be made at the end of each of the next three years if the prevailing rate of interest is 7% compounded annually?

70. Present Value of an Annuity of $1 in Arrears

71. Present Value of an Annuity of $1 in Arrears
Or looking up present value table P690
i=7% n=3
50*2.624=131.2

72. Thank you !
谢谢大家！