The Balance Sheet
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The Wine Industry Audit Technique Guide
The Wine Industry Audit Technique Guide NOTE: This document is not an official pronouncement of the law or the position of the Service and cannot be used, cited, or relied upon as such. This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date. Publication Date: March 2011 Table of Contents Introduction .............................................................................................................................................. 2 Chapter 1 - Overview of Winery/Vineyard Operations ............................................................................ 3 Farming ................................................................................................................................................. 3 Winery (Manufacturing) ....................................................................................................................... 4 Marketing/Sales .................................................................................................................................... 6 Chapter 2 - Pre-Audit Information Gathering ........................................................................................... 8 Information Sources .............................................................................................................................. 8 Chapter 3 - Audit Considerations ............................................................................................................. -
Accounts Receivable Purchase Programs Offer Compelling Financing Advantages
Accounts Receivable Purchase Programs Offer Compelling Financing Advantages By John Padwater Director, Financial Supply Chain Americas [email protected] Although the global financial crisis is behind us, corporations continue to seek new and more advantageous sources of liquidity. One strategic financing option that is gaining popularity is an accounts receivable (A/R) purchase program. In an A/R purchase program, a bank typically purchases a corporation's receivables as soon as the company delivers goods to its customer and issues an invoice. Advantages of such a program can include less expensive financing, favorable off- balance sheet treatment of receivables assets, and reduced credit risk related to the particular obligor. Many corporations are turning to A/R purchase programs because of the negative impact that recent regulatory and accounting changes have had on two other financing alternatives — asset-based lending (ABL) facilities and asset securitization programs. Regulatory and Accounting Drivers Basel III, the latest global regulatory standard for bank capital adequacy, can require financial institutions to hold more capital in support of ABL facilities and asset securitization programs than if they were providing financing through an A/R purchase program. This creates a pricing advantage for corporations selling their receivables. In an asset-based loan, a bank takes a security interest in the collateral. In contrast, with an A/R purchase program, the bank purchases the receivable on a true sale basis, often buying a 100% interest in it on a non-recourse or limited-recourse basis. This affords a particular advantage to non-investment grade companies that have substantial accounts receivable due from investment grade or highly rated counterparties. -
Capital/Fixed Assets Depreciation Schedule Updated: February 2021
Kentucky Department of Education Munis Guide Capital/Fixed Assets Depreciation Schedule Updated: February 2021 Capital/Fixed Assets Depreciation Schedule Office of Education Technology: Division of School Technology Services Questions?: [email protected] 1 | P a g e Kentucky Department of Education Munis Guide Capital/Fixed Assets Depreciation Schedule Updated: February 2021 OVERVIEW The Fixed Assets Depreciation Schedule provides a listing of asset details that were depreciated for the report year as posted from the Fixed Asset module for the report year. Asset descriptions and depreciation details are included such as estimated life, number of periods taken for the year, first and last year periods of depreciation and acquisition cost; all to assist auditors in verifying the depreciation calculation and amounts. The report also includes assets that have been fully depreciated but have a balance remaining of Life-To-Date accumulated depreciation for the reported year. The asset amounts are reported as posted from the Fixed Asset history detail records generated from the Fixed Asset module and does NOT include amounts generated from General Journal Entries. The Depreciation Schedule pulls from two different Fixed Asset sources: 1. Fixed Asset Master File Maintenance 2. Fixed Asset history records The Fixed Asset Master File Maintenance or Asset Inquiry is where the actual asset master records reside; where assets are added and maintained. Key fields and amounts such as the asset Acquisition cost field, Asset Type (Governmental or Proprietary), Class and Sub-class codes are pulled from the asset master file for the Depreciation Schedule. It is vital that these key fields are accurate and tie to the fixed asset history records. -
14. Calculating Total Cash Flows
Chapter 2 Lecture Problems 14. Calculating Total Cash Flows. Greene Co. shows the following information on its 2008 income statement: Sales = $138,000 Costs = $71,500 Other expenses = $4,100 Depreciation expense = $10,100 Interest expense = $7,900 Taxes = $17,760 Dividends = $5,400. In addition, you're told that the firm issued $2,500 in new equity during 2008, and redeemed $3,800 in outstanding long-term debt. a. What is the 2008 operating cash flow? b. What is the 2008 cash flow to creditors? c. What is the 2008 cash flow to stockholders? d. If net fixed assets increased by $17,400 during the year, what was the addition to NWC? a. To calculate the OCF, we first need to construct an income statement. The income statement starts with revenues and subtracts costs to arrive at EBIT. We then subtract out interest to get taxable income, and then subtract taxes to arrive at net income. Doing so, we get: Income Statement Sales $138,000 Costs 71,500 Other Expenses 4,100 Depreciation 10,100 EBIT $52,300 Interest 7,900 Taxable income $44,400 Taxes 17,760 Net income $26,640 Dividends $5,400 Addition to retained earnings 21,240 Page 1 Chapter 2 Lecture Problems Dividends paid plus addition to retained earnings must equal net income, so: Net income = Dividends + Addition to retained earnings Addition to retained earnings = $26,640 – 5,400 Addition to retained earnings = $21,240 So, the operating cash flow is: OCF = EBIT + Depreciation – Taxes OCF = $52,300 + 10,100 – 17,760 OCF = $44,640 b. -
Cash Receipts /Accounts Receivable
Section 8 – Cash Receipts /Accounts Receivable Overview Most local governments collect revenue over the counter and through the mail from the general public in the form of cash, personal checks, credit and debit card transactions, or money orders. Many local governments are also offering online payment options and direct debit of customers’ bank accounts for repetitive payments such as monthly utility bill payments. Collections may take place at multiple locations throughout the government’s operations and be for a number of purposes including: Tax payments Utility payments Various fees and charges Court collections Permits and licenses Other service charges It is necessary to establish an adequate system of controls to assure that all amounts owed to the government are collected, documented, recorded, and deposited to the bank accounts of the government entity, and to detect and deter error and fraud. Suitable controls should be established at each location where payments are received as well as at the centralized collections point. Documentation for each transaction may be generated manually by the use of a pre-numbered receipt form or through the use of a cash register, computer, or other electronic device that will provide the customer with a validated receipt and detailed and/or summary information for the government to use for balancing, reconciliation and auditing purposes. At the end of the day, this documentation is typically reconciled to the total of the cash, checks, and other forms of payment received. Total daily receipts are either manually recorded to the accounting system, or uploaded automatically by way of an electronic interface between the cash receipting and the accounting systems. -
An Introduction to Basic Farm Financial Statements: Balance Sheet
W 884 An Introduction to Basic Farm Financial Statements: Balance Sheet Victoria Campbell, Extension Intern S. Aaron Smith, Associate Professor Christopher N. Boyer, Associate Professor Andrew P. Griffith, Associate Professor Department of Agricultural and Resource Economics The image part with relationship ID rId2 was not found in the file. Introduction Basic Accounting Overview To begin constructing a balance sheet, we Tennessee agriculture includes a diverse list need to first start with the standard of livestock, poultry, fruits and vegetables, accounting equation: row crop, nursery, forestry, ornamental, agri- Total Assets = Total Liabilities + Owner’s tourism, value added and other Equity nontraditional enterprises. These farms vary in size from less than a quarter of an acre to The balance sheet is designed with assets on thousands of acres, and the specific goal for the left-hand side and liabilities plus owner’s each farm can vary. For example, producers’ equity on the right-hand side. This format goals might include maximizing profits, allows both sides of the balance sheet to maintaining a way of life, enjoyment, equal each other. After all, a balance sheet transitioning the operation to the next must balance. generation, etc. Regardless of the farm size, enterprises and objectives, it is important to keep proper farm financial records to improve the long- term viability of the farm. Accurate recordkeeping and organized financial statements allow producers to measure key financial components of their business such A change in liquidity, solvency and equity can as profitability, liquidity and solvency. These be found by comparing balance sheets from measurements are vital to making two different time periods. -
Earnings Per Share. the Two-Class Method Is an Earnings Allocation
Earnings Per Share. The two-class method is an earnings allocation formula that determines earnings per share for common stock and participating securities, according to dividends declared and participation rights in undistributed earnings. Under this method, net earnings is reduced by the amount of dividends declared in the current period for common shareholders and participating security holders. The remaining earnings or “undistributed earnings” are allocated between common stock and participating securities to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. Once calculated, the earnings per common share is computed by dividing the net (loss) earnings attributable to common shareholders by the weighted average number of common shares outstanding during each year presented. Diluted (loss) earnings attributable to common shareholders per common share has been computed by dividing the net (loss) earnings attributable to common shareholders by the weighted average number of common shares outstanding plus the dilutive effect of options and restricted shares outstanding during the applicable periods computed using the treasury method. In cases where the Company has a net loss, no dilutive effect is shown as options and restricted stock become anti-dilutive. Fair Value of Financial Instruments. Disclosure of fair values is required for most on- and off-balance sheet financial instruments for which it is practicable to estimate that value. This disclosure requirement excludes certain financial instruments, such as trade receivables and payables when the carrying value approximates the fair value, employee benefit obligations, lease contracts, and all nonfinancial instruments, such as land, buildings, and equipment. -
Cash Forecasting: Challenges, Modelling, and Visualization April 8, 2019
Cash Forecasting: Challenges, Modelling, and Visualization April 8, 2019 © 2019 Treasury Webinars . All Rights Reserved 1 About Treasury Webinars Treasury Webinars offers webinars designed to empower Treasury, Accounts Payable, and Accounts Receivable success at companies of all sizes, across all industries. We only do what we do best, webinars. © 2019 Treasury Webinars . All Rights Reserved 2 Learning Objectives • Separate cash forecasting myths from reality and define what a successful cash forecast looks like at your company. • Revise specific areas of your cash forecasting process to improve the quality of the short and long-term cash forecasts at your company. • Understand how forecasting done right improves strategic planning and delivers business agility for your company. © 2019 Treasury Webinars . All Rights Reserved 3 Our Agenda • Why Cash Forecasting Matters • Cash Forecasting Myths • Defining Your Cash Forecasting Process & Framework • Leveraging the Right Technology • Cash Forecasting Best Practices • Final Thoughts & Resources © 2019 Treasury Webinars . All Rights Reserved 4 Why Cash Forecasting Matters • Impacts borrowing and investment decisions • Impacts debt covenant compliance risk • Impacts working capital efficiency • Increase visibility into the sources and uses of cash along with the associated costs and benefits • Impacts financial agility • Impacts operational agility • Increased investor focus on cash balances and cash deployment efficiency © 2019 Treasury Webinars . All Rights Reserved 5 Why Cash Flow Forecasting Matters © 2019 Treasury Webinars . All Rights Reserved 6 Budget vs. Plan vs. Forecast •Budget- What you would like to happen •Plan- How you are going to make it happen •Forecast- What you think is going to happen © 2019 Treasury Webinars . All Rights Reserved 7 A Forecast is NOT a Target © 2019 Treasury Webinars . -
Reading and Understanding Nonprofit Financial Statements
Reading and Understanding Nonprofit Financial Statements What does it mean to be a nonprofit? • A nonprofit is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends. • The mission of the organization is the main goal, however profits are key to the growth and longevity of the organization. Your Role in Financial Oversight • Ensure that resources are used to accomplish the mission • Ensure financial health and that contributions are used in accordance with donor intent • Review financial statements • Compare financial statements to budget • Engage independent auditors Cash Basis vs. Accrual Basis • Cash Basis ▫ Revenues and expenses are not recognized until money is exchanged. • Accrual Basis ▫ Revenues and expenses are recognized when an obligation is made. Unaudited vs. Audited • Unaudited ▫ Usually Cash Basis ▫ Prepared internally or through a bookkeeper/accountant ▫ Prepared more frequently (Quarterly or Monthly) • Audited ▫ Accrual Basis ▫ Prepared by a CPA ▫ Prepared yearly ▫ Have an Auditor’s Opinion Financial Statements • Statement of Activities = Income Statement = Profit (Loss) ▫ Measures the revenues against the expenses ▫ Revenues – Expenses = Change in Net Assets = Profit (Loss) • Statement of Financial Position = Balance Sheet ▫ Measures the assets against the liabilities and net assets ▫ Assets = Liabilities + Net Assets • Statement of Cash Flows ▫ Measures the changes in cash Statement of Activities (Unaudited Cash Basis) • Revenues ▫ Service revenues ▫ Contributions -
Example of Internally-Prepared Financial Statements
EXAMPLE OF INTERNALLY-PREPARED FINANCIAL STATEMENTS Balance Sheet (also called a Statement of Financial Position) summarizes the assets, liabilities and net assets of the organization at a specified date. It is a snapshot of the organization’s financial position on that date. Statement of Income and Expenses (also called a Statement of Operations) reports the organization’s financial activity over the year. It shows income minus expenses, which results in either a profit or a loss. ABC Company Balance Sheet As of March 31, 2015 2015 2014 ASSETS Current Assets: Cash 5,000 5,200 Account Receivable 4,000 3,200 Inventory 3,000 5,000 Prepaid Expenses 3,850 - Capital Assets (equipment) 13,000 14,000 TOTAL ASSETS 28,850 27,400 LIABILITIES Current Liabilities: • Accounts Payable and Accrued Liabilities 9,500 9,200 • Other Current Liabilities 3,500 500 • Current portion of Deferred Capital Contributions 1,000 1,000 Deferred Capital Contributions 9,000 10,000 TOTAL LIABILITIES 23,000 20,700 Net Assets Internally restricted 6,000 6,000 Externally restricted 4,000 4,000 Unrestricted (4,150) (3,300) $5,850 6,700 Total Liabilities and Net Assets $28,850 27,400 ABC Company Statement of Income and Expenses For the year ending March 31, 2015 2015 2014 REVENUE Registration fees 10,000 13,800 Grant – City of YZ 12,800 5,000 Donations and Sponsorships 5,000 4,800 Fundraising 3,500 2,410 Equipment 2,300 1,000 TOTAL REVENUE 33,600 27,010 EXPENSES Program costs 11,200 10,000 Advertising and promotion 8,400 9 ,000 Professional fees 8,500 6,000 Fundraising 2,300 1, 01 0 Insurance 1,800 2,000 Office/administration - TOTAL EXPENSES 34,450 28,010 Excess (deficit) of revenue over (850) (1,000) expenses for the year Net assets, beginning of year 6,700 7 ,700 Excess (deficit) of revenue over (850) (1,000) expenses for the year Net assets, end of year 5,850 6 ,700 ANOTHER EXAMPLE OF INTERNALLY-PREPARED FINANICAL STATEMENTS Balance Sheet (also called a Statement of Financial Position) summarizes the assets, liabilities and net assets of the organization at a specified date. -
Capitalization and Depreciation Procedures Policy
Capitalization and Depreciation Procedures Policy Capitalization Policies The following capitalization procedures will be applied to fixed assets as defined by the Financial Accounting and Reporting Manual for Higher Educations (FARM). 1. Land a. Capitalized at cost b. Land and structures purchased or donated together will be separated when possible and capitalized separately c. Cost of preparing the land for use will be capitalized, when material, along with the cost of the land 2. Buildings a. Capitalized if - i. $25,000.00 or more and a life expectancy of at least 10 years b. Additions and renovations will be capitalized if - i. Cost of the project is $25,000.00 or more, and ii. The renovation extends the useful life of the facility or modifies and/or upgrades a building, i.e., installation of updated fire alarms, removal of handicapped barriers, etc 3. Improvements other than buildings a. Capitalized if – i. $5,000.00 or more 1. Examples are parking lots, sidewalks, fiber optics, etc. 4. Equipment a. Capitalized if - i. Cost is $5,000 or more 1. The cost of the equipment will include the purchase price, freight cost, insurance while in shipment, installation cost, and other cost incurred to get the equipment ready for actual use ii. Acquired for use in operations and not held for resale iii. Useful life is long-term in nature - It must yield services for five years or more iv. It is not an integral part of another unit 5. Software a. Capitalized if - i. Cost is $5,000.00 or more ii. Useful life is five years or more iii. -
Accounts Payable Reconciliation Statement
Accounts Payable Reconciliation Statement Precarious and incorruptible Lou reacclimatize almost aborning, though Milt sparged his calorescence swive. Zorro is contractedlymastoid and orconfection yellow any consumedly toucanets whileunreconcilably. cavalier Levin clear and urbanizes. Humanlike Parker never popularise so How i reconcile accounts payable AccountingTools. Escalate issues to rotate Head of Financial Accounting where necessary. Every goal you identify which invoices are covered by a margin payment, jerk off the invoice and cross off on payment. The headings used in said agreement are included for convenience only and will only limit myself otherwise abide these Terms. And adjustment balancing amount. How to reconciliation statement reconciliations allow reconciliation ensures they do business case the payables. Take place on statement should tie to identify any unexplained differences in ap ledger systems guard against. Vlookup function can be flagged in payables account reconciliation, in any web report role of technology frees up? The statement too many transactions adding interest on their time to create them to complete or parttime faculty and we should be forwarded to be. An example form below. Bank Reconciliation Explanation AccountingCoach. Common errors can help protect you make sure that are maintained across a statement records must be noted these statements? A Friday deposit may tell yet holding on Monday's bank statement or a. Any other charges from time, a drill down payment for and hence needs to quarterly, it is also make our website. Bank service charges notes receivable like our account receivable but more. Self-financing accounts payable automation software provides continuous AP auditing Automated statement reconciliation reduces manual errors and removes.