Western Governors University Accounting C251
Capstone Task 2 Home Depot paper
1. Income Statement
2. Statement of Retained Earnings
3. Balance Sheet
4. Statement of cash flows - answers What are the four financial statements in
order?
Net income from the income statement goes on statement of retained earnings -
answers What is the relationship of the income statement and statement of retained
earnings?
The retained earnings goes on the balance sheet - answers What is the relationship
between statement of retained earnings and the balance sheet?
Operating performance - answers What is the income statement?
Assets=liabilities+equity-retained earnings - answers What is the balance sheet?
Also known as retained earnings
Stock activities, dividends - answers Statement of changes in stock holders equity
It does not tell you where you spent your cash - answers Why are income
statements and balance sheets not enough?
Accrual basis and cash basis are not related - answers What does a statement of
cash flow tell us?
They are 90 days or less and short-term, highly liquid - answers Cash equivalents
No - answers Does a statement of cash flow report the cash payments to purchase
cash equivalents
No they are combined into one - answers Does it report the cash receipts from
selling cash equivalents?
1. Operating
2. Investing
3. Financing - answers The three statements of cash flows are:
The cash flows affect net income, current assets, current liability - answers
Operating activities
Receipts from customers
Cash dividends received
Interest from borrowers - answers Operating activities inflows
Salaries and wages
Payments to suppliers
Taxes and fines
, Western Governors University Accounting C251
Capstone Task 2 Home Depot paper
Interest paid to lenders - answers Operating activities outflows
Outflows- depreciation, amortization, depletion and bad debt expense
Inflows- gain/loss on sale of investments - answers Non cash operating items
Debit Truck for $50,000 and credit cash
Debit depreciation expense for $5,000 and credit AD
Yr 2 sold for 42,000
Cash 42,000
Ad. 10000
Credit truck for 50,000 and gain on sale for 2,000
Dr bad debt expense and credit allowance - answers Sold truck for $50,000
Affects no current assets - answers Investing activities
Selling long-term productive assets
Selling investments in securities
Collecting principal on loans - answers Investing activities inflows
Purchasing long-term productive assets
Purchasing equity investments
Purchasing debt investments - answers Investing activities outflows
Affect noncurrent liabilities and equity accounts - answers Financing activities
Issuing its own equity securities
Issuing bonds and notes
Issuing short and long term liabilities - answers Financing activities inflows
Paying dividends
Purchasing treasury stock
Paying owners withdrawals - answers Financing activities outflows
Retirement of debt by issuing equity securities
Capstone Task 2 Home Depot paper
1. Income Statement
2. Statement of Retained Earnings
3. Balance Sheet
4. Statement of cash flows - answers What are the four financial statements in
order?
Net income from the income statement goes on statement of retained earnings -
answers What is the relationship of the income statement and statement of retained
earnings?
The retained earnings goes on the balance sheet - answers What is the relationship
between statement of retained earnings and the balance sheet?
Operating performance - answers What is the income statement?
Assets=liabilities+equity-retained earnings - answers What is the balance sheet?
Also known as retained earnings
Stock activities, dividends - answers Statement of changes in stock holders equity
It does not tell you where you spent your cash - answers Why are income
statements and balance sheets not enough?
Accrual basis and cash basis are not related - answers What does a statement of
cash flow tell us?
They are 90 days or less and short-term, highly liquid - answers Cash equivalents
No - answers Does a statement of cash flow report the cash payments to purchase
cash equivalents
No they are combined into one - answers Does it report the cash receipts from
selling cash equivalents?
1. Operating
2. Investing
3. Financing - answers The three statements of cash flows are:
The cash flows affect net income, current assets, current liability - answers
Operating activities
Receipts from customers
Cash dividends received
Interest from borrowers - answers Operating activities inflows
Salaries and wages
Payments to suppliers
Taxes and fines
, Western Governors University Accounting C251
Capstone Task 2 Home Depot paper
Interest paid to lenders - answers Operating activities outflows
Outflows- depreciation, amortization, depletion and bad debt expense
Inflows- gain/loss on sale of investments - answers Non cash operating items
Debit Truck for $50,000 and credit cash
Debit depreciation expense for $5,000 and credit AD
Yr 2 sold for 42,000
Cash 42,000
Ad. 10000
Credit truck for 50,000 and gain on sale for 2,000
Dr bad debt expense and credit allowance - answers Sold truck for $50,000
Affects no current assets - answers Investing activities
Selling long-term productive assets
Selling investments in securities
Collecting principal on loans - answers Investing activities inflows
Purchasing long-term productive assets
Purchasing equity investments
Purchasing debt investments - answers Investing activities outflows
Affect noncurrent liabilities and equity accounts - answers Financing activities
Issuing its own equity securities
Issuing bonds and notes
Issuing short and long term liabilities - answers Financing activities inflows
Paying dividends
Purchasing treasury stock
Paying owners withdrawals - answers Financing activities outflows
Retirement of debt by issuing equity securities
