usali- balance sheet speaker: christina chi · claims to the assets by outsiders, and equity items...
TRANSCRIPT
USALI- Balance Sheet
Speaker: Christina Chi
online.wsu.edu
USALI - Balance Sheet
Balance Sheet The purpose of the balance sheet is to provide a picture of the
financial condition of the business entity at a particular time.
Assets represent things owned by the property, liabilities are
claims to the assets by outsiders, and equity items are claims by
the owner or owners to the assets.
The balance sheet by category, should reflect each individual
account by names and its numerical balance at the end of a specific
date in the operating period.
The balance sheet can be arranged in either an account format or a
report format.
Balance Sheet
Assets
Current Assets
Non current assets
Non Current Receivables
Long term Investments
Property and Equipment
Fixed assets
Other Assets
Examples of Current Assets Cash
Restricted Cash
Current & non current
Short-term Investments
Receivables
Accounts receivable
Notes receivable
Due From
Loans, advances provided to owner, management company or related party
Inventories
Operating Equipment
Prepaid Expenses
Cash Operating cash $ 925,321.05
House Funds $ 37,500.00
Demand Deposits $ 19,939.69
Total Cash $ 982,760.74
Accounts Receivable
Guest Ledger $ 45,099.89
City Ledger $5,229,360.23
Other Receivables $ 4,054.42
Less: Allowance for doubtful accounts ($ 131,227.63)
Total Accounts Receivables: $5,139,178.07
Inventories Food $ 66,624.33
Beverage $157,263.63
Golf $148,417.38
Supplies $228,955.33
Total Inventories $601,260.67
Operating Equipment
Include Linen, China, Glassware, Silver, & Uniforms
Current assets
Estimated usage of the equipment is less than one year
Long term assets (other assets)
Equipment items with useful lives of more than one year
Prepaid Expenses
Prepaid insurance $ 82,760.60
Prepaid rent $ 6,513.23
Prepaid property taxes $ 125,932.83
Total Prepaid $ 215,206.66
Total Current Assets
Total Cash $ 982,760.74
Total A/R $ 5,139,178.07
Total Inventories $ 601,260.67
Total Prepaid $ 215,206.66
Total Current Assets $ 6,938,406.14
Examples of Property & Equipment
(Fixed Assets)
Land
Buildings
Furnishings and Equipment
Leaseholds and Leasehold Improvements
Construction in Progress
Property and Equipment
Land Improvements $ 8,500.00
Building $ 1,048,917.57
Leasehold Improvement $ 5,287,874.25
Signs $ 1,012.78
Furniture $ 104,275.04
Equipment $ 2,288,651.25
Construction in Progress $ 67,332.73
Golf Course Construction $ 340,483.76
Other $ 570,635.81
Total Property & Equipment $9,717,683.19
Depreciation Schedule for FF&E Components
Furnishings:
Lobby 5-12
Restaurant 5-12
Guestrooms
o Case pieces 8-15
o Mattresses 5-18
Carpet:
Lobby 3-6
Corridor 2-4
Guestrooms 4-8
Drapes 4-8
Bedspreads 3-6
Kitchen Equipment 8-25
Other Assets
Intangible Assets
Patents, copyrights, trademarks / trade names, goodwill, etc.
Cash Surrender Value of Life Insurance
Deferred Charges/expenses
Long term prepayments
Deferred Income Taxes – non-current
Future tax assets
Operating Equipment – non-current
Restricted Cash – non-current
Other
Goodwill Goodwill arises in financial statements when a company is
purchased for more than the book value of the company
The difference is attributed to unidentified intangibles called Goodwill
Goodwill = purchase price – fair value of net assets
Net assets = assets - liabilities
Goodwill is recorded as an asset only when it’s bought and paid for
in connection with the acquisition of a company
Consist of the favorable characteristics of a company that are
intangible and cannot be separately identified and valued
Superior management team
Good labor relations
Outstanding credit rating
High standing in the community, etc.
Financial Accounting Standard #142
The new rules require that intangible assets with
indefinite lives are not amortized, but are reviewed
annually for impairment.
Impairment: Fair value of the company < Carrying value
Fair value is assessed using present value of future cash flow
Carrying value = book value of assets (including goodwill) - liabilities
Liabilities
Current Liabilities
Long-Term Debt
Other Long-Term Liabilities
Deferred Income Taxes
Future tax liabilities
Commitments and
Contingencies (Uniform
System p. 14)
Examples of Current
Liabilities Notes Payable
Due To
Accounts Payable
Accrued Expenses
Advance Deposits Deferred income
Income Taxes Payable
Deferred Income Taxes – current
Current Maturities of long-term debt
Other
Unredeemed gift certificates
Accounts Payable
Trade Payable $ 260,975.77
Total Payables $ 260,975.77
Accrued Payroll & Services
Accrued Payroll $132,835.31
Vacation pay $119,024.20
Service Charge ($ 1,253.52)
Employee 401K Contribution $ 173.05
Incentive Compensation $ 48,196.21
Total Accrued Payroll $298,975.25
Advance Deposits
Advance Deposits $ 580,142.27
Advance Golf Deposits $ 294,790.79
Golf/FIT Membership $ 24,439.57
Unredeemed Gift Certificates $ 406,301.88
Total Advanced Deposits $1,305,674.51
Taxes Payable Sales taxes $
Room / occupancy tax $
Real estate tax $
Total taxes payable $
Long-Term Debt,
Net of Current Maturities
Mortgage Notes
Bonds
Other Notes
Obligations under Capital Leases
Total Long-Term Debt
Owner’s Equity
Owners’ equity = Assets – Liabilities
Presented differently for
Corporations
Characterized by limited liability of its owners, issuance of stock and existence
as a going concern
Limited Liability Company (LLC)
Owners (members) receive limited liability - similar to a corporation but more
flexible form of owner ship
Partnerships
Two or more people own a business and share profits
Sole proprietorship
The owner is the business
Corporation
Stockholder’s Equity
Capital Stock (outstanding # of shares * par value)
+ Additional Paid-in Capital (stocks sold in excess of par value)
+ Retained Earnings (ending bal. = beginning bal. + NI – dividends paid)
- Treasury Stock (stocks reacquired by issuing company)
= Total Stockholders’ Equity
Limited Liability Company (LLC)
Members’ Equity
Beginning capital
+ net income
+ Contributions
- Withdrawals
Ending capital
Partnership Partners’ Equity
General Partners Limited Partners
Beginning capital
+ net income
+ Contributions
- Withdrawals
Ending capital
Total Partners’ Equity
Sole Proprietorship
Owners’ Equity
Beginning capital
+ net income
+ Contributions
- Withdrawals
Ending capital