Chapter 15

Scope and Sequence

15-1 Preparing an Income Statement

• • Uses of financial statements

  • Income statement information on a work sheet

  • Income statement for a merchandising business

15-2 Analyzing an Income Statement

• • Component percentages

  • Income statement showing a net loss

  • Correcting unacceptable component percentages

  • Financial ratios

15-3 Preparing a Statement of Stockholders' Equity

• • Statement of stockholders' equity

15-4 Preparing a Balance Sheet

• • Balance sheet information on a work sheet

  • Balance sheet sections 

  • Supporting schedules for a business sheet

Objectives 

• • Define accounting terms related to financial statements for a merchandising business organized as a corporation 

  • identify accounting concepts and practices related to financial statement for a merchandising business organized as a corporation 

  • Prepare an income statement for a merchandising business organized as a corporation 

  • Analyze an income statement using component percentages and financial ratios

  • Prepare a statement of stockholders' equity for a merchandising business organized as a corporation 

  • Prepare a balance sheet for a merchandising business organized as a corporation 

Vocabulary 

• • Net sales

  • Cost of merchandise sold

  • Gross profit on sales

  • Financial ratio

  • Earnings per share

  • Price-earnings ratio

  • Statement of stockholders' equity

  • Par value

  • Current liabilities

  • Long-term liabilities 

  • Supporting schedules