MGMT 1B Lecture Notes - Lecture 5: Operating Expense, Financial Statement, Income Statement
Document Summary
Depreciation is not a cash outflow but is added back to net income. Can see everything that happens in cash flows (how much debt was paid, dividends paid, etc) Answer to i-banking interviews asking if you could only look at a company"s one financial statement, which would you choose. Corporation uses cash to buy land (16000) and small building (10000) for 26,000. Pay 800 rent for the first month of operation. Lease payment for automobiles for first month of operation . Advertising for 300 - ace race will pay for it later. Instructional fees- ace race will bill the students 16000. Dr a/r 16000 (because a/r is an asset so you dr it to increase it) Cash from the students billed in 6 above. Gas and oil (400) - will pay later. Cr n/p 3000 (n/p because it is a loan so it"s not a/p) Corporation depreciates building over 10 years straight line.
