communication partner
A partnership would never issue bonds payable convertable into common shares. Accounting for Partnerships differs from other organizational types, such as profit allocations to individual owners. There are unique transactions under partnership accounting this is due to the use of capital employed. Corporations rely on both lenders and equity investors.
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Proprietary view |
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Income Statement |
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year ended December 31, 2012 |
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Sales |
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€ 5.600,00 |
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Cost of sales |
(2.900,00) |
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Other expenses |
(1.000,00) |
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Wages expense |
(400,00) |
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Interest expense |
(200,00) |
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Tax expense |
(300,00) |
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Net income |
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€ 800,00 |
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Statement of Retained Earnings |
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year ended December 31, 2012 |
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Opening retained earnings |
€ 2.100,00 |
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Plus: Net income |
800,00 |
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Less: Dividends |
(250,00) |
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Closing retained earnings |
€ 2.650,00 |
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Under the Proprietary view, all groups except owners are |
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viewed as outsiders. |
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Entity view |
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Statement of Operations |
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year ended December 31, 2012 |
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Sales |
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€ 5.600,00 |
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Cost of sales |
-2900 |
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Other expenses |
-1000 |
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Operating income |
€ 1.700,00 |
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Statement of Distribution of Earnings |
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year ended December 31, 2012 |
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Opening retained earnings |
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€ 2.100,00 |
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Plus: Operating income |
1.700,00 |
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Less: Distributions to |
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• employees (400) |
(400,00) |
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• creditors (200) |
(200,00) |
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• governments (300) |
(300,00) |
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• equity investors (250) 550 |
(250,00) |
550,00 |
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Closing retained earnings $ 2,650 |
€ 2.650,00 |
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Entity view considers many more stakeholders |
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Balance Sheet |
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ASSETS |
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Current assets |
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1000 |
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1200:1300 |
Accounts receivable, net |
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1400 |
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1500:1600 |
Inventory |
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Total current assets |
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1700 |
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Capital assets |
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2000 |
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2010 |
Less: accumulated amortization |
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2500 |
Patent, net |
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Total capital assets |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities |
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3000 |
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Total current liabilities |
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3800 |
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Shareholders' equity |
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4000 |
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4500,5000:7500 |
Retained earnings |
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Total shareholders' equity |
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Statement of Retained Earnings |
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4500 |
Retained earnings at beginning of year |
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5000:7500 |
Net Income (loss) |
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Retained earnings at end of year |
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Income Statement |
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5000 |
Sales |
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6000 |
Cost of Sales |
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Expenses |
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7000:7200 |
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Income (loss) from operation |
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Other income (losses) |
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5100:5200 |
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Income before taxes and extraordinary items |
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7300 |
Income tax expense on operations |
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Income before extraordinary gain |
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Extraordinary gain |
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7400 |
Gross amount |
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7500 |
Income tax expense on extraordinary gain |
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Net income |
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