Economics /Management 4
Financial Accounting
Spring 2016
Ugly Puppy Practice
Balance Sheet Template
Cash
Receivables
Customer Advances
Inventory
Payables
Pre Paid Expenses
Accrued expenses
Supplies
Other Current
Liabilities
Long-lived Assets
(Accum. D & A)
Loans
Paid in Capital
Retained earnings
Collect Receivables that have an
Allowance for Bad Debt
0
10
(10)
0
0
0
0
(0)
0
0
0
0
0
0
0
Collect Receivables that have an
Allowance for Bad Debt
Revenue
0
COGS
(0)
GP
0
G&A
10
EBITDA
10
DA
(0)
EBIT
10
I
( 0)
Recurring income 10
Gains (Losses)T ( 0)
NI
10
10
0
(0)
0
0
0
0
0
0
0
0
0
(0)
0
10
Cash
Receivables
10
0
10
A.F.B.D.
10
Expenses
(10)
10
10
Booking & Reporting All of the 4th
Period Practice Events
Check the Reader for the 4TH
Period Practice Set
Period 4 Practice Events
Dispose of both Puppies at the beginning of the
period for $ 30 cash.
Acquire a new Puppy at the beginning of the period
for $100 cash..
Purchase 10 T‐shirts @ $5 each, on‐account.
Sell 10 T‐shirts @ $6 each, cash.
Consult 40 clients and all pay $1 each, cash.
Collect $10 in outstanding Receivables.
Sell 10 T‐shirts at $6 each, cash.
Purchase 10 T‐shirts @ $5 each, cash.
Pay the “Declared Dividends” $100 in dividends.
CASH ACCOUNTING BY EVENT
Beginning Cash
Pay the accrued interest
Dispose of both Puppies for $ 30 cash
Acquire a new Puppy for $100 cash
Purchase 10 T‐shirts @ $5 each, on‐account
Sell 10 T‐shirts @ $6 each, cash
Consult 40 clients and all pay $1 each, cash
Collect $10 in outstanding Receivables
Sell 10 T‐shirts at $6 each, cash
Purchase 10 T‐shirts @ $5 each, cash
Pay the “Declared Dividends”
Ending Cash
$ 226
($ 7)
$ 30
($100)
$ 0
$ 60
$ 40
$ 10
$ 60
($ 50)
($100)
$ 169
Aggressive
(starting balance
sheet)
226
10
( 0)
50
22
30
224
(182)
0
0
7
100
100
200
(27)
AGGRESSIVE BOOKING
Pay the accrued interest:
DR Accrued Expense; CR Cash
Dispose of both Puppies for $ 30 cash
Acquire a new Puppy for $100 cash
DR LLA $100;
CR Cash $100
Purchase 10 T‐shirts @ $5 each, on‐account
DR Inventory $50;
CR Payables $50
Sell 10 T‐shirts @ $6 each, cash
DR Cash $60;
CR Revenue $60
DR COGS $50;
CR Inventory $50
AGGRESSIVE BOOKING, continued
Consult 40 clients and all pay $1 each, cash
DR Cash $40;
CR Revenue $40
Collect $10 in outstanding Receivables
DR Cash $10;
CR A.R.’s $ 10
Sell 10 T‐shirts at $6 each, cash
DR Cash $60;
CR Revenue $60
DR COGS $50;
CR Inventory $50
Purchase 10 T‐shirts @ $5 each, cash
DR Inventory $50;
CR Cash $50
Pay the “Declared Dividends”
DR Divs Declared $100; CR Cash $100
AGG Amortization Schedule
AGG Depreciation Schedule:
2
3
4
$ 33 $ 34 $ 0
5
$ 0
$ 100
$ 33 $ 33 $ 34
$ 0
$ 24
$ 8
$ 8
$ 0
$ 33
$ 75 $ 33
$ 33
Period
$ 100
1
$ 33
$ 100 the new puppy
Total
$ 33 $ 74
$ 8
6
$34
The 4th Period - Aggressive
226
Rev 160
COGS (100)
GP
60
G&A ( 16)
EBITDA
44
10
( 0)
50
0
22
0
30
EBIT
7
224
100
(182)
100
200
(27)
1
DA
( 33)
EBIT
I
EBT
11
( 7)
4
Loss ( 12)
NI
( 8)
60 + 60 + 40
50 + 50 the initial layer + next
(11) + (5)
1st period for new Puppy cost
$30 less NBV of $42 = ($ 12)
Aggressive (closing
balance sheet)
169
0
( 0)
50
0
11
50
25
7
100
0
( 33)
100
200
(35)
Conservative
(starting balance
sheet)
226
10
(10)
10
22
30
200
(200)
50
0
7
100
100
200
(169)
CASH ACCOUNTING BY EVENT
Beginning Cash
Pay the accrued interest
Dispose of both Puppies for $ 30 cash
Acquire a new Puppy for $100 cash
Purchase 10 T‐shirts @ $5 each, on‐account
Sell 10 T‐shirts @ $6 each, cash
Consult 40 clients and all pay $1 each, cash
Collect $10 in outstanding Receivables
Sell 10 T‐shirts at $6 each, cash
Purchase 10 T‐shirts @ $5 each, cash
Pay the “Declared Dividends”
Ending Cash
$ 226
($ 7)
$ 30
($100)
$ 0
$ 60
$ 40
$ 10
$ 60
($ 50)
($100)
$ 169
CONSERVATIVE BOOKING
Pay the accrued interest:
DR Accrued Expense; CR Cash
Dispose of both Puppies for $ 30 cash
Acquire a new Puppy for $100 cash
DR LLA $100;
CR Cash $100
Purchase 10 T‐shirts @ $5 each, on‐account
DR Inventory $50;
CR Payables $50
Sell 10 T‐shirts @ $6 each, cash
DR Cash $60;
CR Revenue $60
DR COGS $50;
CR Inventory $50
CONSERVATIVE BOOKING, continued
Consult 40 clients and all pay $1 each, cash
DR Cash $40;
CR Revenue $40
Collect $10 in outstanding Receivables
DR Cash $10;
CR A.R.’s $ 10
DR AFBD $10;
CR Expense $ 10
Sell 10 T‐shirts at $6 each, cash
DR Cash $60;
CR Revenue $60
DR COGS $50;
CR Inventory $50
Purchase 10 T‐shirts @ $5 each, cash
DR Inventory $50;
CR Cash $50
Pay the “Declared Dividends”
DR Divs Declared $100; CR Cash $100
CON Amortization Schedule
CON Depreciation Schedule:
4
$ 0
5
$ 0
$ 50 $ 50 $ 0
$ 0
$ 100 the new puppy
$ 50
Total
$ 50 $100 $ 50 $ 50
$ 50
$ 50
Period
$ 100
$ 100
1
$ 50
2
3
$ 50 $ 0
6
The 4th Period - Conservative
226
Rev
10
(10)
10
22
30
200
(200)
50
160
COGS (100)
GP
60
60 + 60 + 40
50 + 50 the 20 just purchased
( 6)
54
(11) + (5) + 10 of BDE reversed
DA
EBIT
(50)
4
new puppy cost over 2
100
I
EBT
( 7)
( 3)
200
Gain
30
NI
27
0
7
periods
100
(169)
G&A
EBITDA
$30 less NBV of $0 = $ 30
Conservative
(closing balance
sheet)
169
0
( 0)
10
50
11
50
25
7
100
0
( 50)
100
200
(142)