Following is the income statement and balance sheet of a company that just sold stock to the
public for the first time.
|
Balance sheet at July 31, 2004 |
|
|
Cash |
$3,500 |
|
Accounts receivable |
2,000 |
|
Inventory |
1,700 |
|
Buildings, net |
18,000 |
|
Total assets |
$25,200 |
|
Accounts payable |
$1,500 |
|
Wages payable |
500 |
|
Common stock |
10,000 |
|
Retained earnings |
13,200 |
|
Total liabilities and equity |
$25,200 |
|
Income statement for July 2004 |
|
|
Sales revenue |
$5,000 |
|
Cost of sales |
1,000 |
|
Gross profit |
$4,000 |
|
Operating expenses: |
|
|
Wages |
$500 |
|
Depreciation |
400 |
|
Interest |
200 |
|
Operating income |
$2,900 |
|
Income taxes |
1,015 |
|
Net income |
$1,885 |
The following terms are described under Objective 6 in this chapter. Find and list examples of each of these concepts in the financial statements above.
a. Measurement units
b. Historical costs
c. Accrual basis
d. Fiscal periods
e. Matched
f. Estimation