lesson 13-1
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LESSON 13-1. Work Sheet for a Corporation. ORGANIZATION EXPENSE ADJUSTMENT. page 371. 2. 1. 1.Increase the expense. 2.Decrease the asset. FEDERAL INCOME TAX EXPENSE ADJUSTMENT. page 371. 2. 1. 1.Increase the expense. 2.Increase the liability. - PowerPoint PPT PresentationTRANSCRIPT
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
LESSON 13-1LESSON 13-1
Work Sheet for a Corporation
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
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LESSON 13-1
ORGANIZATION EXPENSE ORGANIZATION EXPENSE ADJUSTMENTADJUSTMENT
1. Increase the expense.
2. Decrease the asset.
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page 371
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LESSON 13-1
FEDERAL INCOME TAX FEDERAL INCOME TAX EXPENSE ADJUSTMENTEXPENSE ADJUSTMENT
1. Increase the expense.
2. Increase the liability.
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page 371
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LESSON 13-1
CALCULATING FEDERAL CALCULATING FEDERAL INCOME TAX EXPENSEINCOME TAX EXPENSE page 372
Calculating Net Income before Federal Income Tax
Income Statement Credit Column Total
Income Statement Debit Column Total
before Federal Income Tax
=Net Income before
Federal Income Tax–
$883,782.75 $752,647.48 = $131,135.27–
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LESSON 13-1
CALCULATING FEDERAL CALCULATING FEDERAL INCOME TAX EXPENSEINCOME TAX EXPENSE page 372
Calculating Federal Income Tax Amount
Net Income before Taxes
Tax Rate =Federal Income
Tax Amount
$ 50,000.00 15% = $ 7,500.00Plus 25,000.00 25% = 6,250.00Plus 25,000.00 34% = 8,500.00Plus 31,135.27 39% = 12,142.76
$131,135.27 $ 34,392.76
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LESSON 13-1
CALCULATING FEDERAL CALCULATING FEDERAL INCOME TAX EXPENSEINCOME TAX EXPENSE page 372
Calculating Accrued Federal Income Tax Expense
Total Federal Income Tax
Expense
Estimated Federal Income Tax Already Paid
=Accrued Federal
Income Tax Expense
–
$34,392.76 $32,000.00 = $2,392.76–
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LESSON 13-1
CORPORATE WORK SHEETCORPORATE WORK SHEET page 374
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LESSON 13-1
CORPORATE WORK SHEETCORPORATE WORK SHEET page 375
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LESSON 13-1
TERM REVIEWTERM REVIEW
amortization
page 376
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LESSON 13-2LESSON 13-2
Financial Statements and Analysis
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LESSON 13-2
INCOME STATEMENT INCOME STATEMENT FOR A CORPORATIONFOR A CORPORATION page 377
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LESSON 13-2
INCOME STATEMENT INCOME STATEMENT FOR A CORPORATIONFOR A CORPORATION page 377
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LESSON 13-2
ACCEPTABLE AND ACTUAL ACCEPTABLE AND ACTUAL COMPONENT PERCENTAGESCOMPONENT PERCENTAGES page 378
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LESSON 13-2
SHARE OF NET INCOME SHARE OF NET INCOME ASSIGNED TO PREFERRED STOCKASSIGNED TO PREFERRED STOCK page 378
Calculating Share of Net Income for Preferred Stock
Total Par Value Dividend Rate =Preferred Stock’s
Share of Net Income
$170,000.00 8% = $13,600.00
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LESSON 13-2
Total Net IncomePreferred Stock’s
Share of Net Income
=Common Stock’s
Share of Net Income
SHARE OF NET INCOME SHARE OF NET INCOME ASSIGNED TO COMMON STOCKASSIGNED TO COMMON STOCK page 378
Calculating Share of Net Income for Preferred Stock
$96,742.51 $13,600.00 = $83,142.51
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LESSON 13-2
EARNINGS PER SHAREEARNINGS PER SHARE page 379
Calculating Earnings per Share
Share of Net Income
Shares of Stock Outstanding
= Earnings per Share÷
$83,142.51 31,950 = $2.60÷
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LESSON 13-2
STATEMENT OF STOCKHOLDERS’ STATEMENT OF STOCKHOLDERS’ EQUITY FOR A CORPORATIONEQUITY FOR A CORPORATION page 379
2.2. Retained earnings section2.2. Retained earnings section
1.1. Paid-in capital section1.1. Paid-in capital section
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LESSON 13-2
Total Stockholders’
Equity
Shares of Capital Stock Outstanding
= Equity per Share
÷
ANALYZING A STATEMENT OF ANALYZING A STATEMENT OF STOCKHOLDERS’ EQUITYSTOCKHOLDERS’ EQUITY page 380
Calculating Equity per Share
$170,000.00 1,700 = $100.00÷Preferred
448,655.86 31,950 = 14.04÷Common
$618,655.86Total
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LESSON 13-2
Calculating Price-Earnings Ratio
Market Priceper Share
Earnings per Share
=Price-Earnings
Ratio÷
$19.50 $2.60 = 7.5 times÷
ANALYZING A STATEMENT OF ANALYZING A STATEMENT OF STOCKHOLDERS’ EQUITYSTOCKHOLDERS’ EQUITY page 380
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LESSON 13-2
BALANCE SHEET FOR A BALANCE SHEET FOR A CORPORATIONCORPORATION page 381
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LESSON 13-2
BALANCE SHEET FOR A BALANCE SHEET FOR A CORPORATIONCORPORATION page 381
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LESSON 13-2
Beginning Book Value
=Allowance for Uncollectible Accounts Beginning Balance
–Accounts Receivable Beginning Balance
ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLE TURNOVER RATIOTURNOVER RATIO
Calculating the average book value of accounts receivable
page 382
$124,579.31=2÷$128,536.91)+($120,621.71
$128,536.91=$6,697.63–$135,234.54
Ending Book Value=Allowance for Uncollectible
Accounts Ending Balance–
Accounts Receivable Ending Balance
$120,621.71=$4,362.18–$124,983.89
Average Book Value of Accounts Receivable
=2÷Ending Book Value
of Accounts Receivable
+Beginning Book
Value of Accounts Receivable
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LESSON 13-2
ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLE TURNOVER RATIOTURNOVER RATIO
Calculating the accounts receivable turnover ratio
page 382
Net Sales on Account
Average Book Value of Accounts
Receivable=
Accounts Receivable
Turnover Ratio÷
$861,356.72 $124,579.31 = 6.9 times÷
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LESSON 13-2
ACCOUNTS RECEIVABLE ACCOUNTS RECEIVABLE TURNOVER RATIOTURNOVER RATIO
Calculating the average number of days for payment
page 382
Days in YearAccounts
Receivable Turnover Ratio
=Average Number of Days for Payment÷
365 6.9 = 53÷
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LESSON 13-2
Average Stockholders’ Equity
=2÷December 31
Stockholders’ Equity+
January 1 Stockholders’ Equity
$498,622.11=2÷$618,655.86)+($378,588.35
19.4%=$498,622.11÷$96,742.51
Rate Earnedon Average
Stockholders’ Equity=
AverageStockholders’
Equity÷
Net Incomeafter FederalIncome Tax
RATE EARNED ON AVERAGE RATE EARNED ON AVERAGE STOCKHOLDERS’ EQUITYSTOCKHOLDERS’ EQUITY
Calculate average stockholders’ equity
page 383
Calculate the rate earned
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LESSON 13-2
AverageTotal Assets
=2÷December 31Total Assets
+January 1
Total Assets
$838,573.69=2÷$952,171.03)+($724,976.34
11.5%=$838,573.69÷$96,742.51
Rate Earned onAverage Total Assets
=Average
Total Assets÷
Net Incomeafter FederalIncome Tax
RATE EARNED ON RATE EARNED ON AVERAGE TOTAL ASSETSAVERAGE TOTAL ASSETS
Calculate average total assets
page 383
Calculate the rate earned
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LESSON 13-2
TERMS REVIEWTERMS REVIEW
earnings per share equity per share market value price-earnings ratio rate earned on average stockholders’ equity rate earned on average total assets
page 365
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LESSON 13-3LESSON 13-3
Other End-of-Fiscal-Period Work
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LESSON 13-3
ADJUSTING ENTRIESADJUSTING ENTRIES page 386
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LESSON 13-3
ADJUSTING ENTRIESADJUSTING ENTRIES page 386
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LESSON 13-3
CLOSING ENTRIESCLOSING ENTRIES
Need art form page 397.
page 387
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LESSON 13-3
POST-CLOSING TRIAL BALANCEPOST-CLOSING TRIAL BALANCE page 388
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LESSON 13-3
POST-CLOSING TRIAL BALANCEPOST-CLOSING TRIAL BALANCE page 388
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LESSON 13-3
REVERSING ENTRIESREVERSING ENTRIES page 389
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LESSON 13-3
FEDERAL INCOME TAX RETURNFEDERAL INCOME TAX RETURN page 390
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LESSON 13-3
FEDERAL INCOME TAX RETURNFEDERAL INCOME TAX RETURN page 390