Accounting Cycle for a Merchandising Business - Part 2
What is the Accounting Cycle in a Merchandising Business?
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What is the Accounting Cycle in a Merchandising Business?
0:00:00.399,0:00:04.080
All right. Here we are with part two of
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chapter four's example
0:00:04.080,0:00:07.120
and so in the part one we did all the
0:00:05.920,0:00:09.360
journal entries and see
0:00:07.120,0:00:11.280
t tables and in this video we're going
0:00:09.360,0:00:12.960
to do the adjusted trial balance and the
0:00:11.280,0:00:14.480
financial statements, so in order to
0:00:12.960,0:00:15.200
really understand where the numbers come
0:00:14.480,0:00:17.760
from
0:00:15.200,0:00:18.720
with this part of the the video series
0:00:17.760,0:00:20.480
for example
0:00:18.720,0:00:22.800
for this example you really need to see
0:00:20.480,0:00:26.000
the first part which is in video one
0:00:22.800,0:00:27.199
um the first part of the example. So
0:00:26.000,0:00:28.800
but hopefully you have all this
0:00:27.199,0:00:30.080
information here's your t tables nothing
0:00:28.800,0:00:32.000
has changed they haven't done anything
0:00:30.080,0:00:33.120
to them I just carried them over from
0:00:32.000,0:00:34.719
the last video.
0:00:33.120,0:00:36.559
So we're going to start off with the
0:00:34.719,0:00:38.160
adjusted trial balance first
0:00:36.559,0:00:39.760
and this is adjusted because we've
0:00:38.160,0:00:40.879
already done the adjustment we only had
0:00:39.760,0:00:42.800
one, so we didn't do an
0:00:40.879,0:00:44.320
uh an unadjusted trial balance because
0:00:42.800,0:00:46.079
there was only one
0:00:44.320,0:00:48.000
so we just kind of lumped them into this
0:00:46.079,0:00:49.520
one, but all I'm going to do is I'm going
0:00:48.000,0:00:51.440
to list all of my accounts
0:00:49.520,0:00:53.760
and their respective balance on their
0:00:51.440,0:00:55.280
their proper side their normal side
0:00:53.760,0:00:56.640
whether it be debit or credit so just to
0:00:55.280,0:01:00.160
kind of give you an idea cash I'm going
0:00:56.640,0:01:02.559
to start with cache 48 860.
0:01:00.160,0:01:04.000
I'm going to put ar you don't have to
0:01:02.559,0:01:05.519
because it's zero but I'm just going to
0:01:04.000,0:01:09.560
go ahead and put that there
0:01:05.519,0:01:12.000
I'm going to do inventory of 8890
0:01:09.560,0:01:14.560
same thing with land you don't have
0:01:12.000,0:01:17.759
to put land there just because it's zero
0:01:14.560,0:01:19.040
but uh you can if you would like uh and
0:01:17.759,0:01:21.439
then we also have
0:01:19.040,0:01:22.640
ap, ap has a balance of zero which would
0:01:21.439,0:01:23.920
normally go on the credit side you don't
0:01:22.640,0:01:25.280
have to put that one there,
0:01:23.920,0:01:26.640
and for the sake of time I'm just going
0:01:25.280,0:01:28.000
to go ahead and just put the rest of
0:01:26.640,0:01:29.200
them on here and you can kind of follow
0:01:28.000,0:01:30.799
along check your work hopefully you've
0:01:29.200,0:01:32.799
done this already.
0:01:30.799,0:01:33.840
And so once I've got it to this point
0:01:32.799,0:01:36.720
then I'm going to go
0:01:33.840,0:01:38.320
to uh the debit column and add up all
0:01:36.720,0:01:39.280
the debit column and when you do that
0:01:38.320,0:01:42.479
you should get a
0:01:39.280,0:01:43.759
sum of 77 500,
0:01:42.479,0:01:45.360
and then I'm going to do the same thing
0:01:43.759,0:01:46.560
for the credit column and hope that it's
0:01:45.360,0:01:50.000
going to be the same
0:01:46.560,0:01:51.439
number and it is, it is 77 500, so we know
0:01:50.000,0:01:52.880
that our trial balance is good we know
0:01:51.439,0:01:54.479
all of our debits and all of our credits
0:01:52.880,0:01:56.320
equal that's spot on with what we need
0:01:54.479,0:01:58.399
to do with the accounting cycle,
0:01:56.320,0:01:59.840
so that leads us to the next step in the
0:01:58.399,0:02:02.479
accounting cycle which is
0:01:59.840,0:02:03.360
the financial statements. And so we know
0:02:02.479,0:02:05.759
we start off
0:02:03.360,0:02:07.360
with the income statement and to this
0:02:05.759,0:02:08.959
we're going to put charlie company
0:02:07.360,0:02:10.879
for whatever you know whatever the year
0:02:08.959,0:02:13.360
is and we're going to be doing a
0:02:10.879,0:02:14.720
multi-step income statement for this one,
0:02:13.360,0:02:16.560
because we have all the pieces that
0:02:14.720,0:02:18.319
would make it favorable to use a
0:02:16.560,0:02:20.080
multi-step income statement we have cogs,
0:02:18.319,0:02:22.160
we have non-operating income
0:02:20.080,0:02:23.520
or not operating activities, and so forth
0:02:22.160,0:02:25.280
so let's let's do that.
0:02:23.520,0:02:27.040
We know in a multi-step income statement
0:02:25.280,0:02:29.120
we're going to start off with not just
0:02:27.040,0:02:30.879
revenues but operating revenues
0:02:29.120,0:02:32.400
so that's the first part and under that
0:02:30.879,0:02:33.440
we're going to start with our sales
0:02:32.400,0:02:36.080
revenue our normal
0:02:33.440,0:02:38.959
day-to-day revenue and so sales revenue
0:02:36.080,0:02:41.120
we have a total of thirty thousand,
0:02:38.959,0:02:42.560
and from that we're going to take away
0:02:41.120,0:02:44.959
the two pieces
0:02:42.560,0:02:46.239
that affected sales revenue directly
0:02:44.959,0:02:47.200
which are going to be returns and
0:02:46.239,0:02:48.879
discounts,
0:02:47.200,0:02:50.800
so let's start with the discounts. So
0:02:48.879,0:02:52.959
I'll say less sales discount
0:02:50.800,0:02:54.400
of we had a sales discount of 100 that
0:02:52.959,0:02:56.959
we gave,
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we also had sales returns that we took
0:02:56.959,0:03:01.599
back from customers
0:02:58.080,0:03:02.720
that were 2 000 total, so those are those
0:03:01.599,0:03:04.239
two t tables
0:03:02.720,0:03:05.760
and if I add that up that's going to
0:03:04.239,0:03:08.959
give me a sum of
0:03:05.760,0:03:09.440
2100 and if I subtract that 2100 from
0:03:08.959,0:03:12.720
the
0:03:09.440,0:03:13.440
30 000 that's going to net my sales to
0:03:12.720,0:03:17.360
be
0:03:13.440,0:03:19.280
14 excuse me 27 900,
0:03:17.360,0:03:21.680
so that's my net sales that's what I
0:03:19.280,0:03:23.680
ended up ending the year in total
0:03:21.680,0:03:24.799
sales revenue after the discounts and
0:03:23.680,0:03:26.560
the returns.
0:03:24.799,0:03:28.319
All right. From that I want to take away
0:03:26.560,0:03:30.560
my cost of goods sold
0:03:28.319,0:03:32.159
remember this is more informat and more
0:03:30.560,0:03:33.280
informative I understand that that's an
0:03:32.159,0:03:34.480
expense but
0:03:33.280,0:03:35.920
this is more informative to our
0:03:34.480,0:03:36.480
investors to say hey this is what we
0:03:35.920,0:03:40.560
truly made
0:03:36.480,0:03:41.599
on our sales, so net sales minus my cogs
0:03:40.560,0:03:43.840
of 14100
0:03:41.599,0:03:45.120
that's going to give me a total
0:03:43.840,0:03:47.440
operating
0:03:45.120,0:03:48.640
revenue of thirteen thousand eight
0:03:47.440,0:03:50.159
hundred,
0:03:48.640,0:03:52.560
all right so that takes care of
0:03:50.159,0:03:55.040
operating revenues. Now let's go into
0:03:52.560,0:03:56.879
operating expenses.
0:03:55.040,0:03:58.840
We only have two operating expenses we
0:03:56.879,0:04:00.159
have delivery expense which is three
0:03:58.840,0:04:02.959
hundred
0:04:00.159,0:04:04.159
and we have selling an admin expense
0:04:02.959,0:04:06.560
which is going to be
0:04:04.159,0:04:07.280
3 000. We add that up that's going to
0:04:06.560,0:04:09.760
give us a
0:04:07.280,0:04:13.200
total operating excuse me it should say
0:04:09.760,0:04:16.079
total operating expense of 3300
0:04:13.200,0:04:16.639
and if I subtract my total operating
0:04:16.079,0:04:19.040
revenue
0:04:16.639,0:04:20.639
minus my total operating expense that's
0:04:19.040,0:04:23.919
going to give me a total operating
0:04:20.639,0:04:25.919
income of 10 500,
0:04:23.919,0:04:27.280
so from an investor standpoint I'm going
0:04:25.919,0:04:28.080
to look at this go okay that's something
0:04:27.280,0:04:30.320
I can expect
0:04:28.080,0:04:31.120
year over year or at least growth on
0:04:30.320,0:04:33.040
that hopefully
0:04:31.120,0:04:35.280
year over year but that's their business
0:04:33.040,0:04:36.960
this is their their main business model.
0:04:35.280,0:04:38.240
Now let's look at the non-operating
0:04:36.960,0:04:40.000
activities the things that are more or
0:04:38.240,0:04:41.280
less one-offs I can't expect them
0:04:40.000,0:04:43.520
they're going to happen year every year
0:04:41.280,0:04:46.240
I can't plan for.
0:04:43.520,0:04:48.000
So we have a few we have the first one
0:04:46.240,0:04:50.400
being gain on the sale of land,
0:04:48.000,0:04:51.759
remember land is not my business so this
0:04:50.400,0:04:52.720
is just kind of a one-off I just made
0:04:51.759,0:04:54.320
some money,
0:04:52.720,0:04:55.919
so I'm going to put that down here it's
0:04:54.320,0:04:58.560
going to be positive number because it
0:04:55.919,0:05:00.160
is a in revenue coming in is like a
0:04:58.560,0:05:02.160
revenue it's a gain,
0:05:00.160,0:05:03.600
I also have interest expense and
0:05:02.160,0:05:05.039
interest expense is considered a
0:05:03.600,0:05:07.360
non-operating activity
0:05:05.039,0:05:09.039
because once the note's gone it's gone,
0:05:07.360,0:05:12.400
so we have interest expense
0:05:09.039,0:05:14.000
of 250 again that's negative because
0:05:12.400,0:05:15.440
it's an expense,
0:05:14.000,0:05:17.440
and so then I'm going to total out my
0:05:15.440,0:05:18.880
non-operating activities. So I'm going to
0:05:17.440,0:05:22.320
take the the sum of
0:05:18.880,0:05:24.240
2500 plus negative
0:05:22.320,0:05:26.160
250 that's going to give me a total
0:05:24.240,0:05:30.720
non-operating income
0:05:26.160,0:05:32.880
of 2250.
0:05:30.720,0:05:34.560
And if I take my total non-operating
0:05:32.880,0:05:36.080
income and add it to my total
0:05:34.560,0:05:39.120
non-operating income
0:05:36.080,0:05:40.320
that's going to give me a net income of
0:05:39.120,0:05:43.440
12750,
0:05:40.320,0:05:45.199
so that's my net income
0:05:43.440,0:05:46.639
for charlie company for this year. Now
0:05:45.199,0:05:48.880
let's move to the next
0:05:46.639,0:05:50.800
financial statement which is going to be
0:05:48.880,0:05:52.479
our statement of retained earnings.
0:05:50.800,0:05:53.680
Our retained earnings to begin with
0:05:52.479,0:05:55.680
remember we start with our beginning
0:05:53.680,0:05:57.360
retained earnings is going to be zero
0:05:55.680,0:05:58.639
why is it zero it's not supposed to be
0:05:57.360,0:05:59.520
there in the bottom again I don't know
0:05:58.639,0:06:01.199
why that's there
0:05:59.520,0:06:02.960
uh retained earnings table should not be
0:06:01.199,0:06:06.000
there but
0:06:02.960,0:06:08.000
uh it is zero because this is the first
0:06:06.000,0:06:09.360
year of this business so everything
0:06:08.000,0:06:09.919
starts at zero we have no beginning
0:06:09.360,0:06:13.840
balances.
0:06:09.919,0:06:15.199
so zero plus uh our net income
0:06:13.840,0:06:16.880
which is going to we just found to be
0:06:15.199,0:06:18.160
twelve thousand seven fifty that's going
0:06:16.880,0:06:19.600
to give me an intermediate number of
0:06:18.160,0:06:22.000
twelve thousand seven fifty.
0:06:19.600,0:06:23.520
our dividends we had no dividends so
0:06:22.000,0:06:25.840
that's going to be zero. so that means
0:06:23.520,0:06:27.919
our ending retained earnings is going to
0:06:25.840,0:06:30.960
be exactly what our net income is
0:06:27.919,0:06:32.160
which is twelve thousand seven fifty. All
0:06:30.960,0:06:35.039
right. So now let's go
0:06:32.160,0:06:36.080
into our balance sheet nothing's
0:06:35.039,0:06:37.360
changing here
0:06:36.080,0:06:39.280
uh we're just going to list out our
0:06:37.360,0:06:44.240
assets liabilities and equity
0:06:39.280,0:06:48.479
assets we have cash of 48 860,
0:06:44.240,0:06:50.880
inventory we have 8890,
0:06:48.479,0:06:51.680
you can put again ar and land if you
0:06:50.880,0:06:53.039
want to
0:06:51.680,0:06:56.160
but there's zero I'm going to leave them
0:06:53.039,0:06:56.720
out on this one, so our total assets is
0:06:56.160,0:07:00.400
going to be
0:06:56.720,0:07:01.520
57 750. Now let's look at our
0:07:00.400,0:07:03.599
liabilities
0:07:01.520,0:07:05.120
I could put ap there but it's a zero
0:07:03.599,0:07:06.319
balance so I'm just going to only put
0:07:05.120,0:07:07.840
notes payable because that's the only
0:07:06.319,0:07:10.400
liability I have a balance in
0:07:07.840,0:07:11.039
so 10 000 which means my total liability
0:07:10.400,0:07:13.520
is going to be 10000,
0:07:11.039,0:07:15.199
and finally equity remember we're
0:07:13.520,0:07:16.560
only really focusing on two
0:07:15.199,0:07:18.560
it's going to be common stock and
0:07:16.560,0:07:20.880
retained earnings, our common stock is
0:07:18.560,0:07:22.800
going to be 35 000
0:07:20.880,0:07:24.479
and our retained earnings we just found
0:07:22.800,0:07:27.919
from our statement of retained earnings
0:07:24.479,0:07:29.199
that's going to be 12 750,
0:07:27.919,0:07:32.000
if I add that that's going to give me a
0:07:29.199,0:07:34.639
total equity of 47 750
0:07:32.000,0:07:35.680
and if I add that 47 750 to the 10 000
0:07:34.639,0:07:36.639
in liabilities
0:07:35.680,0:07:39.120
that's going to give me total
0:07:36.639,0:07:42.240
liabilities and equity of 57750
0:07:39.120,0:07:43.599
and that matches my total asset so I
0:07:42.240,0:07:45.440
know I'm on the right path, remember
0:07:43.599,0:07:46.479
assets it has to equal liability and
0:07:45.440,0:07:48.400
equity so
0:07:46.479,0:07:50.080
we know we're good there. All right. So
0:07:48.400,0:07:50.879
that's the balance sheet the last thing
0:07:50.080,0:07:53.440
that we're going to do
0:07:50.879,0:07:54.879
is our statement of cash flow, and
0:07:53.440,0:07:55.520
remember to do the statement of cash
0:07:54.879,0:07:57.280
flow
0:07:55.520,0:07:59.199
we're really only going to focus in on
0:07:57.280,0:08:01.199
the cash t table
0:07:59.199,0:08:02.319
that's the key to the statement of cash
0:08:01.199,0:08:05.120
flow,
0:08:02.319,0:08:06.000
so let's do that. First we need to go
0:08:05.120,0:08:09.759
through and write our
0:08:06.000,0:08:11.039
fa's, oas, and ias. So 1-1 the 35 000 that
0:08:09.759,0:08:12.879
was for common stock that's going to be
0:08:11.039,0:08:15.759
fa
0:08:12.879,0:08:18.240
210 that 10 000 that was for the sale
0:08:15.759,0:08:22.400
from customers when they paid cash
0:08:18.240,0:08:24.160
that was oa 514 and 6-1
0:08:22.400,0:08:26.160
those were both from customers when they
0:08:24.160,0:08:27.520
paid off their accounts receivable
0:08:26.160,0:08:30.240
so those again are both are going to be
0:08:27.520,0:08:34.560
oa so over there over there.
0:08:30.240,0:08:36.560
831 that was the 7 500 from us
0:08:34.560,0:08:37.919
selling the land that we got for we got
0:08:36.560,0:08:39.279
cash back in return so that's going to
0:08:37.919,0:08:40.479
be ia
0:08:39.279,0:08:42.479
investing dealing with long-term
0:08:40.479,0:08:46.080
productive assets and then the nine
0:08:42.479,0:08:47.360
one that 10 000 was from getting the
0:08:46.080,0:08:49.040
loan from the bank, so
0:08:47.360,0:08:51.360
remember investors and creditors deal
0:08:49.040,0:08:55.360
with fa so that's going to be fa.
0:08:51.360,0:08:56.959
On the credit side we have 10 000
0:08:55.360,0:08:58.720
that was for the purchase of inventory
0:08:56.959,0:09:01.920
the first purchase of inventory,
0:08:58.720,0:09:05.200
so that's going to be oa. The 250 was the
0:09:01.920,0:09:08.480
uh cost to get that inventory sent to us
0:09:05.200,0:09:11.200
so again that's going to be oa the 5000
0:09:08.480,0:09:12.880
at 12 15 excuse me 215 that is going to
0:09:11.200,0:09:15.920
be the purchase of the land,
0:09:12.880,0:09:17.200
so that is going to be an ia, then we
0:09:15.920,0:09:19.200
also had 12 740
0:09:17.200,0:09:21.760
that's what we paid for some more
0:09:19.200,0:09:25.040
inventory so that would be oa,
0:09:21.760,0:09:28.800
300 that was for
0:09:25.040,0:09:31.920
uh what was that one for that was for
0:09:28.800,0:09:32.880
oh the the delivery expense when we had
0:09:31.920,0:09:34.320
to sell,
0:09:32.880,0:09:36.160
all right, when we had to send the
0:09:34.320,0:09:37.760
inventory that we sold to our customers
0:09:36.160,0:09:41.440
remember is our responsibility
0:09:37.760,0:09:43.680
so that was uh oa, 3000 was for s
0:09:41.440,0:09:44.720
a expenses that again a normal expense
0:09:43.680,0:09:47.839
so that's oa,
0:09:44.720,0:09:50.160
and then finally 250 that is
0:09:47.839,0:09:51.040
for interest expense and that is going
0:09:50.160,0:09:52.959
to be oa
0:09:51.040,0:09:54.880
as well. All right. So now that we have
0:09:52.959,0:09:56.640
the fa's is always
0:09:54.880,0:09:58.240
we can go through and fill out our
0:09:56.640,0:09:59.519
statement of cash flow, so starting with
0:09:58.240,0:10:00.720
the first one remember we always want to
0:09:59.519,0:10:02.079
start with the best foot forward we want
0:10:00.720,0:10:03.120
to start with positive numbers
0:10:02.079,0:10:05.200
so we're going to start on the debit
0:10:03.120,0:10:08.399
side of the cash.
0:10:05.200,0:10:09.680
So fa that 35 000 we are going to put as
0:10:08.399,0:10:13.040
cash received from
0:10:09.680,0:10:16.160
common stock 35 000. All right.
0:10:13.040,0:10:19.920
The next three so 210 for 10
0:10:16.160,0:10:22.560
000. five 514 for 9 900
0:10:19.920,0:10:24.000
and 6 1 for 8 000, all of those came
0:10:22.560,0:10:26.480
from customers those were all payments
0:10:24.000,0:10:28.079
from customers for our inventory
0:10:26.480,0:10:30.160
so I'm just going to lump those together
0:10:28.079,0:10:30.839
and call it cash received from customers
0:10:30.160,0:10:34.640
of
0:10:30.839,0:10:35.920
27.9. All right. The next one which is 83
0:10:34.640,0:10:38.560
was ia
0:10:35.920,0:10:40.720
that was for the sale of land so I'll
0:10:38.560,0:10:44.720
say cash received from sale of land
0:10:40.720,0:10:47.920
for 7 500, and then finally fa
0:10:44.720,0:10:49.120
the 91f8 that was for the loan that we
0:10:47.920,0:10:51.200
got from the bank,
0:10:49.120,0:10:52.720
so I'm going to call it cash received
0:10:51.200,0:10:55.360
from notes payable
0:10:52.720,0:10:56.640
under fa for 10 000. All right. That
0:10:55.360,0:10:58.160
takes care of all of our debits now
0:10:56.640,0:11:00.880
let's look at our credits
0:10:58.160,0:11:02.000
uh the first one one two that ten
0:11:00.880,0:11:04.800
thousand was
0:11:02.000,0:11:05.920
for inventory but also so was the one
0:11:04.800,0:11:08.160
three
0:11:05.920,0:11:10.079
for 250 was dealing with inventory as
0:11:08.160,0:11:13.440
well as the 328
0:11:10.079,0:11:14.800
12 740 was for inventory, so all of those
0:11:13.440,0:11:15.920
together were for inventory so I'm just
0:11:14.800,0:11:16.959
going to lump those together
0:11:15.920,0:11:18.720
because they all deal with the same
0:11:16.959,0:11:20.320
thing and I'm going to call that cash
0:11:18.720,0:11:22.640
payment for inventory
0:11:20.320,0:11:24.240
and I'm going to set it negative because
0:11:22.640,0:11:28.000
again this is money coming out
0:11:24.240,0:11:30.399
so negative 22 990.
0:11:28.000,0:11:31.040
All right the next one would be two fifteen
0:11:30.399,0:11:33.600
that five
0:11:31.040,0:11:35.040
thousand uh that was for ia that was when
0:11:33.600,0:11:36.560
we originally purchased the land
0:11:35.040,0:11:37.360
remember we purchased the land for five
0:11:36.560,0:11:39.120
thousand,
0:11:37.360,0:11:40.720
so we're going to put that in as a cash
0:11:39.120,0:11:43.839
payment for the purchase of land
0:11:40.720,0:11:44.560
of negative five thousand. The next one
0:11:43.839,0:11:46.079
would be five
0:11:44.560,0:11:47.600
five that three hundred that was for the
0:11:46.079,0:11:50.000
delivery expense so
0:11:47.600,0:11:52.160
cash payment for delivery expense of
0:11:50.000,0:11:54.399
negative three hundred,
0:11:52.160,0:11:57.200
we have the seven fifteen entry for the
0:11:54.399,0:11:59.040
three thousand that was for s a expenses
0:11:57.200,0:12:00.639
so we will again call it cash payment
0:11:59.040,0:12:04.000
for s a expenses
0:12:00.639,0:12:07.120
of negative 3 000 again under oa,
0:12:04.000,0:12:10.320
and the last one was the 1231 oa
0:12:07.120,0:12:13.200
of 250 which was the interest expense
0:12:10.320,0:12:14.160
and so we will put that up under oa as
0:12:13.200,0:12:15.920
cash payment for
0:12:14.160,0:12:17.200
interest expense. Now I do want to point
0:12:15.920,0:12:18.160
out something because maybe it's it's
0:12:17.200,0:12:19.279
kind of.
0:12:18.160,0:12:20.480
Hopefully it's not but maybe it's
0:12:19.279,0:12:22.160
throwing you for loop because if you
0:12:20.480,0:12:23.360
remember when we did the multi-step
0:12:22.160,0:12:26.079
income statement
0:12:23.360,0:12:27.600
we put interest expense on that under
0:12:26.079,0:12:29.040
non-operating activity
0:12:27.600,0:12:30.560
but here we're putting it under
0:12:29.040,0:12:31.600
operating activity and that's just
0:12:30.560,0:12:34.560
something that
0:12:31.600,0:12:35.120
that's a rule in accounting but for the
0:12:34.560,0:12:36.880
purpose
0:12:35.120,0:12:39.120
of interest expense and interest
0:12:36.880,0:12:40.560
revenues those go up under non-operating
0:12:39.120,0:12:42.639
activities on this
0:12:40.560,0:12:44.000
income statement, however they go up
0:12:42.639,0:12:45.200
under operating activities for the
0:12:44.000,0:12:48.480
statement of cash flow so
0:12:45.200,0:12:49.839
just be mindful of that. All right. So now
0:12:48.480,0:12:50.320
that we got all of our activities
0:12:49.839,0:12:52.959
together
0:12:50.320,0:12:54.720
we can total those up the net cash flow
0:12:52.959,0:12:56.639
from operating activities is going to be
0:12:54.720,0:12:58.800
one thousand three sixty,
0:12:56.639,0:13:00.160
the net cash flow from ia or investing
0:12:58.800,0:13:01.200
activities is going to be two thousand
0:13:00.160,0:13:02.959
five hundred,
0:13:01.200,0:13:04.399
and the net cash flow from financing
0:13:02.959,0:13:04.720
activities that is going to be forty
0:13:04.399,0:13:07.200
five
0:13:04.720,0:13:08.480
thousand, if we add those three numbers
0:13:07.200,0:13:10.560
up that's going to give me a net
0:13:08.480,0:13:12.399
increase in cash of forty eight thousand
0:13:10.560,0:13:14.000
eight sixty,
0:13:12.399,0:13:15.680
if we add to it our beginning cash
0:13:14.000,0:13:17.120
balance which remember we're a brand new
0:13:15.680,0:13:17.600
business so we have zero in our
0:13:17.120,0:13:19.760
beginning
0:13:17.600,0:13:21.600
balances of everything, so if we add
0:13:19.760,0:13:23.360
forty eight thousand eight sixty to zero
0:13:21.600,0:13:25.360
we will get an ending cash balance of
0:13:23.360,0:13:26.639
forty eight thousand eight sixty which
0:13:25.360,0:13:29.120
also happens to be
0:13:26.639,0:13:30.480
again this is a check figure the ending
0:13:29.120,0:13:33.040
cash balance for our cash t
0:13:30.480,0:13:34.880
table, that's what we want. So that's how
0:13:33.040,0:13:37.120
we do the
0:13:34.880,0:13:38.800
trial balance as well as all of the
0:13:37.120,0:13:39.199
financial statements, and in the next
0:13:38.800,0:13:40.800
video
0:13:39.199,0:13:42.639
the last video for this chapter we will
0:13:40.800,0:13:44.480
be going over the closings
0:13:42.639,0:13:48.079
and the post-closing trial balance, so
0:13:44.480,0:13:48.079
y'all have a good one.
Related Topics
- What is Merchandising? – Financial Accounting
- Recognizing Inventory Sales – Financial Accounting
- Perpetual vs Period Systems – Financial Accounting
- Special Merchandising Transactions – Financial Accounting
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- Multi-Step Income Statement – Financial Accounting
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- Accounting Cycle for Merchandising Business Example Part 2
- Accounting Cycle for Merchandising Business Example Part 3