Categoría: Bookkeeping

Time-tracking software can help you determine how much time employees spent manufacturing specific products. It’s challenging to allocate overhead accurately, so it can potentially cloud your understanding of a product’s profitability. Comparing prime costs instead can be more telling because it takes imprecise allocations out of the conversation. Technological changes directly affect the Prime Cost,…

Snack Shack’s direct labor cost is $70,000 ($15,000 Rhonda’s wages + $15,000 Jose’s wages + $40,000 Amelia’s wages). Since James doesn’t cook or serve, his earnings don’t count in the direct labor calculation. Multinational manufacturing companies operate their businesses in various locations across the globe, and they have to purchase raw materials from different destinations.…

SE is a number that stock investors and analysts look at when they’re evaluating a company’s overall financial health. It helps them to judge the quality of the company’s financial ratios, providing them with the tools to make better investment decisions. Stockholders’ equity is a company’s total assets minus its total liabilities. As referred above,…

Stockholders’ equity is important for a company because it demonstrates the amount of money that would be available to either pay off liabilities or reinvest in the business. Retained earnings grow in value as long as the company is not distributing them to shareholders and only investing them back into the business. Paid-in capital also…

Approximately half way down on the table of contents you will see Financial Statements. When you review the statement of stockholders’ equity you will see that it reports the amounts for each of the most recent three years. Treasury stock reduces total shareholders’ equity on a company’s balance sheet. This figure is subtracted from a…

Here is an example of how to prepare a statement of stockholder’s equity from our unadjusted trial balance and financial statements used in the accounting cycle examples for Paul’s Guitar Shop. First, the beginning equity is reported followed by any new investments from shareholders along with net income for the year. Second all dividends and…