,单击此处编辑母版标题样式,单击此处编辑母版文本样式,第二级,第三级,第四级,第五级,*,Chapter 9,Financial Statements and Closing Entries,for A Merchandising Sole Proprietorship,The Classified Financial Statements,In a merchandising business with more accounts,classified financial statements are often prepared.,In,the,classified financial statements,accounts are grouped into different classifications so as to make the accounting information more meaningful to the users of financial statements.,The Classified Income,Statement,The classified income statement for Guangli Furniture Store consists of three basic classifications:,1,)the revenue from sales section;,2,)the cost of goods sold section;,3,)the operating expenses section.,1)the revenue from sales section,The Revenue from Sales section consists of the Sales account,reduced by the Sales Returns and Allowances account and the Sales Discount account,which give us the,net sales,.,Net Sales=Sales-Sales Returns and,Allowances,-Sales,Discount,The net sales of Guangli Furniture Store for the current fiscal year is 518 000(527 000-5 000-4 000=518 000)yuan.,2)the cost of goods sold section,The,cost of goods sold,by a merchandising business during a fiscal year appears in the income statement as a deduction from the net sales of the year.,Cost,of Goods Sold=Beginning Merchandise Inventory+Net Purchases,-,Ending Merchandise,Inventory,Net,Purchases=Purchases-Purchases Returns and Allowances,-,Purchases,Discounts,Cost of Goods Sold=200 000+(357 000-5 700-3 300)-250 000,=298 000 yuan,3)the operating expenses section,The,operating,expenses,are those regular expenses involved in doing business.They may be subdivided into a number of different categories,such as,selling expenses,and,general and,administrative expenses,etc,.,Total operating expenses=36 000+1 200+1 000+150+600+,1 000=,39 950 yuan,The Gross Profit Rate,The,gross profit rate,is one of the rates which are used to evaluate the profitability of a merchandising business,.,Gross profit rate,=,Gross profit for the year,100,%,Net,sales for the year,The gross profit rate of Guangli Furniture Store for the current fiscal year is 42.47%(gross profit,220 000 yuan,divided by net sales,518 000 yuan).,Merchandise Inventory Turnover,The,merchandise inventory turnover,indicates the number of times that the average inventory is sold during a fiscal year,.,Merchandise,inventory,turnover=,Cost of goods sold,Average merchandise inventory,Average merchandise inventory,=,Beginning inventory+Ending inventory,2,The merchandise turnover of Guangli Furniture Store is computed as follows,:,Merchandise inventory turnover=,298 000,(200 000+250 000)/2,=,1.32 times per month,The Statement of Owners,Equity,Guangli Furniture Store,Statement of Owners Equity,For month ended December 31,201,Li,Capital,December 1,201,411 950,Add:Net Income for the month,180 050,Subtotal,592 000,Less:Withdrawals for the month,6 000,Li,Capital,December 31,201,586 000,The Rate of Return on Investment,The,rate of return on,investment,indicates,the earning ability of the owners investment in the business,.,Rate of return on investment=,Net income for the year,100%,Average capital,Average capital=,Beginning capital+Ending capital,2,The rate of return on investment of Guangli Furniture Store is calculated as follows:,Rate,of return on investment=,180 050,100%,(411 950+586 000)/2,=,36.08%,The Classified Balance,Sheet,Assets,Current,assets,：,include,cash and any other assets that are expected to expire or be converted into cash within a relatively short period of time,which is usually a year.,In,a classified balance sheet,current assets are listed in the order of their,liquidity,(i.e.their convertibility into cash).Plant and,equipment,：,those,assets which have a relatively long useful life(usually more than one year)and are used in the operations of the business,not for resale to customers.,Other assets.All other assets that do not fall in the above two groups are recorded in the category of other assets.,The Classified Balance Sheet,Liabilities,current liabilities,.Current liabilities are debts of a business which should be repaid within one year or a normal operating cycle.,long-term liabilities,.Long-term liabilities refer to those debts that are due in a period of more than one year,such as,Mortgage Payable,and long-term bank loans.,The Classified Balance Sheet,Owners,equity,The owners equity section of balance sheet of a sole proprietorship only consists of the owners capital account.,The Working Capital,The difference between total current assets and total current liabilities is called,working capital,.,It,reflects the short-term financial strength of a business.,Working capital=Current assets-Current,Liabilities,=436 600-185 000,=251 600 yuan,The Current Ratio,Current ratio,is an important indicator that measures the short-term,solvency,(i.e.short-term debt-paying ability)of a business.,It,is computed by dividing total current assets by total current liabilities,.,Current ratio=,Total current assets,436