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    Unit 5: Worksheets: Worksheet 1 The Contents of Financial Statements

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    This document contains worksheets related to financial statements. Worksheet 1 defines key terms like assets, liabilities, equity and provides exercises to identify different financial statements and the structure of corporate ownership. Worksheet 2 provides financial data for a company called Keith Sales and requires the student to prepare the income statement, statement of owners' equity, and balance sheet based on the trial balance information provided. Additional exercises from the student handout package are to be submitted along with the module worksheets.

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    Unit 5: Worksheets: Worksheet 1 The Contents of Financial Statements

    Uploaded by

    Sommerled
    45 views12 pages
    This document contains worksheets related to financial statements. Worksheet 1 defines key terms like assets, liabilities, equity and provides exercises to identify different financial statements and the structure of corporate ownership. Worksheet 2 provides financial data for a company called Keith Sales and requires the student to prepare the income statement, statement of owners' equity, and balance sheet based on the trial balance information provided. Additional exercises from the student handout package are to be submitted along with the module worksheets.

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    Fin Stats

    Original Title

    Sb 102 Module 1 Financial Statements

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    This document contains worksheets related to financial statements. Worksheet 1 defines key terms like assets, liabilities, equity and provides exercises to identify different financial statements and the structure of corporate ownership. Worksheet 2 provides financial data for a company called Keith Sales and requires the student to prepare the income statement, statement of owners' equity, and balance sheet based on the trial balance information provided. Additional exercises from the student handout package are to be submitted along with the module worksheets.

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    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    45 views12 pages

    Unit 5: Worksheets: Worksheet 1 The Contents of Financial Statements

    Uploaded by

    Sommerled
    This document contains worksheets related to financial statements. Worksheet 1 defines key terms like assets, liabilities, equity and provides exercises to identify different financial statements and the structure of corporate ownership. Worksheet 2 provides financial data for a company called Keith Sales and requires the student to prepare the income statement, statement of owners' equity, and balance sheet based on the trial balance information provided. Additional exercises from the student handout package are to be submitted along with the module worksheets.

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    You are on page 1of 12

    Unit 5: WORKSHEETS

    WORKSHEET 1
    The Contents of Financial Statements

    1. In the space provided, write the name of the financial statement you would
    look at to find the following information about a business:

    The results of operations for a period of time

    Sources and uses of cash - how cash was


    obtained and what it was used for during
    a period of time

    The resources (assets) of the business and


    the claims against those resources (liabilities)

    2. Below are the names used to describe six financial statement items. In the
    spaces provided, write what you understand each of these terms to mean:

    Asset

    Expense

    Liability

    Owners’ Equity

    Net Income

    Revenue
    WORKSHEET 1 (cont’d)

    3. Below are parts of the Equity section of the Balance Sheets of three
    different businesses:

    A.
    COMPANY A
    Share Capital $12,000
    Retained Earnings 9,000

    Total $21,000

    B.
    COMPANY B
    L. Lane, Capital $21,000

    C.
    COMPANY C

    F. Francis, Capital $ 8,000


    G. Garrison, Capital 6,000
    H. Harrison, Capital 7,000

    $21,000

    a) Which company is a sole proprietorship?

    b) Which company is a partnership?

    c) Which company is a corporation?

    d) Which of the three companies would be likely to show Income Tax


    Expense
    in the Income Statement and Income Tax Payable on the Balance
    Sheet?

    Explain why:
    e) When would a business have a "negative" equity figure and what does
    it indicate?
    WORKSHEET 1 (cont’d)

    4. Below is a list, in alphabetical order, of items found in the financial


    statements of a typical
    small business.

    Using the key below, identify in which part of the financial statements each
    of these items
    would be found. If you think that an item could be found in more than one
    place in the financial statements, give what you think is the most likely
    answer. For example, “Depreciation” must be an Expense Account (Income
    Statement), because Accumulated Depreciation is also listed, which is a
    Balance Sheet item. The answers for several items have been provided to
    guide you.

    KEY: DIFFERENT "PARTS" OF FINANCIAL STATEMENTS

    CA = Current Asset LL = Long-term Liability


    FA = Fixed Asset OE = Owners' Equity
    OA = Other Asset R = Revenue
    CL = Current Liability E = Expense

    LIST BELOW THE ABBREVIATION FOR THE “PART” FROM WHICH EACH
    ITEM COMES
    AND INDICATE WHETHER EACH IS A BALANCE SHEET(BS) OR
    STATEMENT(IS) ITEM.

    (Several answers are provided to help you get started)

    BS or BS or
    “Part” IS? “Part” IS?
    CA Accounts Receivable BS Office Salaries Payable
    Accounts Payable Office Supplies on Hand
    FA Accumulated Depreciation BS Office Supplies Expense
    Advertising Expense Loan Payable (due in 2 mo.)
    Capital Sales
    Cash Utilities Expense
    E Depreciation Expense IS Drawings
    Fees Earned Prepaid Insurance
    Insurance Expense Rent Expense
    Inventory Prepaid Rent
    Office Equipment Utilities Deposit
    Office Salaries Expense Mortgage
    WORKSHEET 2
    Preparation of Financial Statements for a Business

    Listed below are the figures for the financial statement items for Keith Sales
    Company as at
    December 31, 2005, the end of the Company’s fiscal year. This list is a “trial
    balance”, a form
    in which a bookkeeper would summarize the figures at the end of the year.

    You will notice that the Assets are listed first, followed by the Liabilities, Owners'
    Equity, Revenues and Expenses in that order. This is standard practice and
    makes it easier to prepare the financial statements.

    You may also have noticed that the figures for Assets and Expenses are listed in
    the left column while the figures for Liabilities, Capital and Revenue are listed in
    the right column. This is standard practice.

    Keith Sales Company


    Trial Balance
    as at December 31, 2005

    Cash $ 6,000
    Accounts Receivable 15,000
    Inventory (ending Inventory) 45,000
    Office Supplies on hand 2,500
    Store Equipment 26,000
    Accumulated Depreciation - Store Equipment $ 9,000
    Accounts Payable 12,000
    Salaries Payable 1,500
    Mack Keith, Capital, December 31, 1998 52,000
    Sales 200,000
    Cost of Goods Sold 140,000
    Salaries Expense 15,000
    Rent Expense 12,000
    Utilities Expense 2,000
    Advertising Expense 6,500
    Depreciation Expense 4,500

    Totals $ 274,500 $ 274,500

    Instructions: Use the information above to prepare an Income Statement, a


    Statement
    of Owners' Equity and a Balance Sheet in the spaces provided on
    the following pages.

    Note that the left column (debit) items are equal in total to the
    right column (credit) items; hence, the term "Trial Balance".
    WORKSHEET 2 (cont’d)

    Keith Sales Company


    Income Statement
    for the Year Ended December 31, 2005
    WORKSHEET 2 (cont’d)

    Keith Sales Company


    Statement of Owners' Equity
    for the Year Ended December 31, 2005
    WORKSHEET 2 (cont’d)

    Keith Sales Company


    Balance Sheet
    as at December 31, 2005

    NOTE: Your total assets must equal the total liabilities plus owners'
    equity.
    The owners' equity figure should come from the Owners' Equity
    Statement
    on the previous page.
    OTHER ITEMS TO SUBMIT
    WITH MODULE 6 WORKSHEETS

     Exercise in Fall Student Handout Package: “Adam Smith Repair Service”.

     Exercise in Fall Student Handout Package: “Hockey Haven”.

     Exercise in Fall Student Handout Package: L. Norwood”.

    Suggested:
    Remove the SB102 Module 1 Lecture Notes “Glendale Market” from the Fall Student
    Handout Package and attach to your SB102 Module 1 notes for study purposes.

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