BUSINESS FINANCE

Mrs. Josette Gimeno-Tamayo

Prayer
 Chapter 2:
Review of Financial Statement Preparation.
Analysis and Interpretation
Motivation
Objectives:
At the end of the lesson, the students will able to:

1. Know the information found in the different

financial statements
2. Differentiate the different basic financial
statements
3. Be familiar with the preparation of financial
statements

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Financial
Statements
SI
G
NI OWNERS
FI
CA
NC
E Financial
GOVERNMENT MANAGEMENT
Statement

CREDITORS

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Basic Financial Statements

: 1. Statement of Financial Position or

Balance Sheet
2. Statement of Profit or Loss or
Income Statement
3. Statement of Cash Flows
4. Statement of Changes in Stockholder’s
Equity

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1. Statement of Financial Position or Balance Sheet
: prepared to show the
firm’s financial
position on a given
A = L + OE
date
LIABILITIES
 shows the status of
ASSETS = +
assets, liabilities, and
owner’s equity of the
OWNER’S
firm EQUITY

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1. Statement of Financial Position or Balance Sheet
1. Current Assets
Cash
 Assets  Cash equivalents
 Notes Receivable
 Accounts Receivable
 Liabilities
 Inventories
 Prepaid Expenses
 Owner’s
Equity 2. Non-current Assets
Property, Plant, Equipment
 Accumulated Depreciation
 Intangible Assets

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1. Statement of Financial Position or Balance Sheet
1. Current Liabilities
Accounts payable
 Assets Notes payable
Accrued Liabilities
 Liabilities Unearned revenues
Current portion of long-term debt

 Owner’s 2. Non-current Liabilities

Equity Mortgage payable
Bonds payable

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1. Statement of Financial Position or Balance Sheet

Capital
 Assets
Withdrawals

 Liabilities Income summary

 Owner’s
Equity

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 ANDRES NICOLAS CORPORATION
Balance Sheet
December 31, 2016
Assets Liabilities
Current Assets Current Liabilities
Cash P 78,130.00 Due banks P 45,000.00
Accounts Receivable 97,943.00 Notes Payable 24,000.00
Inventory 161,351.00 Accounts Payable 40,203.00
Total Current Assets P 337,424.00 Taxes 5,960.00
Total Current Liablities P 115,163.00
Non-current Assets
Equipment P 131,067.00 Non-current Liabilities
Other non-current aasets 51,670.00 Long-term debt P 180,000.00
Total Non-current Assets P 182,737.00 Total Non-current Liabilities 180,000.00
Total Assets P 520,161.00 Total Liabilities 295,163.00
Owner's Equity
Common stock P 104,500
Retained Earnings 120,498
Total Owner's Equity 224,998
Total Liabilities and Owner's Equity P 520,161.00

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2. Statement of Profit or Loss or Income Statement

 provides information Income or Revenue

regarding the Expenses
revenues or sales,
expenses, and net
income of a company
over a given
accounting period

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2. Statement of Profit or Loss or Income Statement

Service Income
 Income Sales

 Expenses

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2. Statement of Profit or Loss or Income Statement
Cost of Sales

 Income Salaries or wages expense

 Telecommunication, Electricity, Fuel, and
 Expenses Water expenses
 Rent expense
 Supplies expense
 Insurance expense
 Depreciation expense
 Interest expense

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 VR ILAGAN COMPANY
Income Statement
For the year ended December 31, 2016
Sales P 2,585,000.00
Cost of Sales 1,395,800.00
Gross Profit 1,189,200.00
Operating Expenses
Salaries P 350,000.00
Depreciation 35,000.00
Insurance 48,950.00
Advertising 56,030.00
Miscellaneous 87,950.00 577,930.00
Income before taxes 611,270.00
Taxes 160,000.00
Net Income P 451,270.00

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3. Statement of Cash Flows

 provides an
explanation regarding  operating
the change in cash
balance from one  Investing
accounting period to  financing
another

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 Strauss Printing Services
Statement of Cash Flows
For the Year Ended December 31, 2017
 
     
Cash Flow from Operating Activities:    
  Cash received from customers P  146,000  
  Cash paid for expenses (81,000)  
  Cash paid to suppliers (47,500) P   17,500
Cash Flow from Investing Activities:    
  Cash paid to acquire additional equipment   (20,300)
Cash Flow from Financing Activities:    
  Cash received from investment of owner P   10,000  
  Cash received from bank loan 50,000  
  Cash paid for bank loan – partial payment (27,000)  
  Cash paid to owner – withdrawal (20,000) 13,000
Net Increase (Decrease) in Cash for the Year   P   10,200
Add: Cash – January 1, 2017 10,800
Cash – December 31, 2017 P   21,000
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4. Statement of Changes in Stockholder’s Equity
Changes may be due to the ff.:
 provides an
information that  Profit or loss for the accounting period
explains the changes  Cash dividend declaration
in the stockholder’s  Issuance of new shares of stocks
equity account from  Other transactions that affect the
one accounting stockholder’s equity such as other
period to another comprehensive income, treasury
stocks, and reevaluation of assets

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 Strauss Printing Services
Statement of Owner's Equity

For the Year Ended December 31, 2017

       

Strauss, Capital P   100,000

Add: Additional Contributions   10,000

  Net Income   57,100

Total P   167,100

Less: Strauss, Drawings   20,000

Strauss, Capital – Dec. 31, 2017 P   147,100

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