T-Account: Asset accounts: Cash, bank, accounts receivable, inventory, land, buildings/plant, machinery, furniture, equipment, vehicles, trademarks

and patents,
goodwill, prepaid expenses, debtors (people who owe us money), etc. Liability accounts: Accounts payable, salaries and wages payable, income taxes, bank
overdrafts, trust accounts, accrued expenses, sales taxes, advance payments (unearned revenue), debt and accrued interest on debt, etc. Equity accounts: Capital,
drawings, common stock, accumulated funds, etc. Income/Revenue accounts: Services rendered, sales, interest income, membership fees, rent income, interest
from investment, recurring receivables, donation etc. Expense accounts: Telephone, water, electricity, repairs, salaries, wages, depreciation, bad debts, stationery,
entertainme
nt,
honorarium,
rent, fuel,
utility etc.





Notice:
Decreasing COGS from Inventory
Adding the Retain Earning to Equity

ACCOUNT TYPE DEBIT CREDIT
Asset +
Liability +
Income +
Expense +
Equity +
BALANCE SHEET

INCOME STATEMENT
Current Assets

Current Liabilities

Sales Revenue
Cash

Accounts Payable

Interest
Accounts Receivable

Interest Payable

cost of goods sold
Prepaid
Rent/Advertising/Insurance

Notes Payable

GROSS PROFIT
Inventory

Wages Payable


Short Term Notes Receivable

Advances from tenants/customers

Expenses
Interest Receivable

Accrued Expenses/taxes

Operational
Short term Investments

Loans/Mortgage Payable

Rent
Other Current Assets



Depreciation


TOTAL C.L

R&D


Non-current Liabilities

Advertising
TOTAL C.A

Loan

Wages


Mortgage

Total Expenses
Non-current assets

Pension/Long Term Tax Liabilities


Building



Operating income or loss (EBITDA)
Equipment

TOTAL N.C.L

Interest expense
Land




Accumulated Depreciation

TOTAL LIABILITIES

Net Income before taxes (EBIT)
Goodwill



Taxes Expenses
Long Term Investments

Equity


Intangible/Other Assets

Owner's equity

Net Income


Retained Earnings
TOTAL N.C.A

Common Stocks



Preferred Stocks
TOTAL ASSETS

Dividends




Treasury Stock





TOTAL EQUITY





TOTAL LIABILITIES & EQUITY

Ratio
TIE Ratio Operating Income / Interest Expense
Return on Equity Net Income / Shareholder Equity * use the Average for Shareholder Equity
Return on Assets Net Income / Total Assets * use the Average for Total Assets
Debt Ratio Total Liabilities / Total Assets
Debt to Equity Ratio Total Liabilities / Total Equity
Current Ratio Current Assets / Current Liabilities
Quick Ratio (Current Assets - Inventory) / Current Liabilities
Days Sales outstanding Sales / # of shares Outstanding
Earnings Per Share Net Income / # of Share outstanding
Gross Profit Margin Gross Profit / Net Revenue
Inventory Turns Cost of Goods Sold / Inventory * use Average for Inventory
Inventory Days Average Inventory / Daily COGS
Bad debt Expense & Allowance for Doubtful Accounts
Sansome company has reported the following net Accounts receivable for
the past 2 years:

2013 2012


Accounts Receivable, net

14,250

12,875


The following information comes from the notes of Sansome Company's
latest annual report (10k):
Allowance for Doubtful
Accounts 2013 2012 2011

Beginning Balance 34 30 25
Additions to Bad Debt
Provision 15 12 10
Deductions, net of
recovery -9 -8 -5

Ending Balance 40 34 30

a. What is the Gross Accounts Receivable for 2013 and 2012?
2013 2012


Gross Accounts Receivable

14,290

12,909 EndinBala+net
b. What is the % of uncollectible accounts for 2013 and 2012?
2013 2012

% of uncollectible
accounts 0.28% 0.26% EndinBala/Gross
c. What was the bad debt expense for 2013, 2012 ,and 2011 and what was
the total for all three years?
d. What were the write-offs for Account Receivable for 2013, 2012, 2011?
2013 2012 2011 Total










Bad Debt Expense 15 12 10 37
Write-offs to AR -9 -8 -5 -22
Year
Cash
Collections
($M)
Cost
Incurred % of costs
Revenue
Recognized
Net
Income
2007 30 15 17.65% 21.2 6.2
2008 50 40 47.06% 56.5 16.5
2009 40 30 35.29% 42.4 12.4
120 85 100.00% 120.0 35.0
Percentage of Completion Method