USALI- Balance Sheet Speaker: Christina Chi · claims to the assets by outsiders, and equity items...

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Transcript of USALI- Balance Sheet Speaker: Christina Chi · claims to the assets by outsiders, and equity items...

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