Page 438 - Introduction to Business

412 PART 4 Accounting

Balance Sheet

balance sheet The financial statement The balance sheet of Cathy’s Candy Company is shown in Exhibit 12.4. The balance
that provides a “snapshot” of a firm’s sheet is dated December 31, 2004, the last day of the firm’s accounting period. A
financial position at a designated point
in time (12 midnight on the balance balance sheet provides a “snapshot” of a firm’s financial position at a designated
sheet date) point in time (12 midnight on the balance sheet date). This is different from the
other three accounting reports, which are period statements that account for
events that occur throughout the year.
statement of financial position Another The balance sheet is also referred to as the statement of financial position. The
name for the balance sheet balance sheet shows three types of accounts: assets, liabilities, and owners’ equity.
Corporations designate owners’ equity as stockholders’ equity because the stock-
holders are the owners.

EXHIBIT 12.4

Cathy’s Candy Company
Consolidated Balance Sheet

Dec. 31, 2004 Dec. 31, 2003
Balance Sheet Elements ($ millions) ($ millions)
Assets
Current assets
1. Cash 1,710 2,745
2. Accounts receivable 1,153 1,199
3. Inventory 2,000 1,000
4. Prepaid expenses 750 546
5. Total current assets 5,613 5,490
Long-term assets: property and equipment
6. Leasehold improvements 3,120 2,538
7. Equipment 4,803 3,708
8. Land and buildings 1,218 663
9. Total property and equipment 9,141 6,909
10. Accumulated depreciation (3,513) (2,814)
11. Net property and equipment 5,628 4,095
12. Intangibles and other assets 648 423
13. Total assets 11,889 10,008
Liabilities
Current liabilities
14. Notes payable, short-term 274 255
15. Accounts payable 2,053 1,250
16. Accrued expenses payable 1,965 1,217
17. Income taxes payable 367 251
18. Total current liabilities 4,659 2,973
Long-term liabilities
19. Long-term debt 1,488 1,488
20. Other long-term liabilities 1,023 795
21. Total long-term liabilities 2,511 2,283
Stockholders’ equity
22. Common stock 1,194 765
23. Retained earnings 9,363 7,176
24. Treasury stock (5,706) (3,030)
25. Other equity (132) (159)
26. Total stockholders’ equity 4,719 4,752
27. Total liabilities and
stockholders’ equity 11,889 10,008

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