Accounting and Finance for Non-Specialists Class Summary with exercises

Week 1
- Cash flow
- Income statement
- Financial position


Facts:
o Paul bought paper for 40 euro
o Sold 3/4 of supplies for 45 euro

Cash flow: Income statement: Financial position:
Cash at start 40 Revenue 45 Cash closing 45
Cash paid (40) Cost (sales) (30) Inventory 10
Cash received 45 -------------------------- -------------------------
---------------------- Profit 15 Assets 55
Cash closing 45 (45-30 = 15)
(40-40+45 = 45)
Equity 55
Liability -
-------------------------
Total 55
(..) = in de min…. ‘negatief’


New facts:
o Paul bought paper for 20 euro
o Sold and supplies is for 48 euro

Cash flow: Income statement: Financial position:
Cash at start 45 Revenue 48 Cash closing 73
Cash paid (20) Cost (sales) (30) Inventory -
Cash received 48 -------------------------- -------------------------
---------------------- Profit 18 Assets 73
Cash closing 73 (48-30 = 18)
(45-20+48 = 73)
Equity 73
Liability -
-------------------------
Total 73

,Newest facts:
o Paul borrows 27 euro from an old friend
o Bought new paper for 50 euro
o Sold 1/2 of all supplies for 20 euro

Cash flow: Income statement: Financial position:
Cash at start 100 Revenue 20 Cash closing 70
Cash paid (50) Cost (sales) 25 Inventory 25
Cash received 20 -------------------------- -------------------------
---------------------- Profit (5) Assets 95
Cash closing 70 (20-25 = -5)
(100-50+20 = 70)
Equity 68
Liability 27
-------------------------
Total 95

,Week 2
- Financial position (Balance sheet)
- Income statement (profit and loss account)
- Statement of cash flow

Balance sheet
o Giving the financial position
o Car = €23.950

Bank loan = €20.000
Equity = €3.950

Financial position
Asset €23.950 Equity €3.950
Liability €20.000




Giving the financial position on a specific moment
→ 1 year later

Financial position
Asset €19.000 Equity €1.400
Liability €17.600




BUT…
o What happened during the past year?
€3.950 → €1.400
→ Profit and loss account (income statement)
o Does the owner have enough money to pay for gass?
→ Statement of cash flow

, Prepare the statement of financial position on 20 June last year.

Step 1 → look for non-current assets
Step 2 → look for current assets
Step 3 → look for the equity
Step 4 → look for non-current liabilities
Step 5 → look for current liabilities
Step 6 → calculate the equity

Trade payable 86
Motor vehicles 38
Long-term borrowing 260
Equipment and tools 207
Short-term borrowings 116
Inventories 153
Property 320
Trade receivables 185

Non-current assets Equity
Motor vehicles 38 ……. → 441
Equipment and tools 207
Property 320 Non-current liabilities
Long term borrowing 260
Current assets
Inventories 153 current liabilities
Trade receivables 185 Trade payable 85
Short-term borrowings 116

-------------------------------------------- total --------------------------------------- total
903 903
(903-116-85-260 = 441 → so, equity is 441)