Accounting in Merchandising Companies
Dav's
Books |
||
Period Ended 20X6 |
Period Ended 20X7 |
|
| Beginning Contributed Capital Plus: Capital Acquisition |
$
0 |
$12,000 |
| Ending Contributed Capital | $12,000 |
$12,000 |
| Beginning Retained Earnings Plus: Net Income Less: Distributions |
$ 0 |
$2,800 |
| Ending Retained Earnings | $2,800 |
$4,080 |
| Total Equity | $14,800 |
$16,080 |
Dav's
Books |
||
For Period Ended 20X6 |
For Period Ended 20X7 |
|
| Cash Flows from Operating Activities Cash Receipts from Sales Revenue Cash Payments for Expenses |
|
|
| Net Cash Flow from Operating Activities | $600 |
(1,576) |
| Net Cash Flow from Investing Activities | $ 0 |
$ 0 |
| Cash Flows from Financing Activities Cash Receipts from Capital Contrib. |
|
|
| Net Cash Flows from Financing Activities | $9,000 |
$ 0 |
| Net Change in Cash Plus: Beginning Cash Balance |
$9,600 |
(1,576) |
| Ending Cash Balance | $9,600 |
$8,024 |
5.6.6 Multiple-step and single-step income statements
Note a new format of the Income Statement. This format matches particular revenues with respective expenses. For example, Net Sales and Cost of Goods Sold provide information on the difference between the selling price and the cost of goods sold. Such format of the income statement is used to prepare information for financial analysis. Income statements of such kind are called multiple-step income statements.
Multiple-step income statement shows numerous steps in determining a net income (or net loss). Each step provides a different measure of a company's results of operations.
In contrast, a single-step income statement that we had been dealing with before only includes information on total revenues and total expenses.
Single-step income statement shows only one step in determining a net income (or net loss).
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