Expense statement

The ability to understand and apply the concepts of cost analysis, profitability analysis, budgets, income-and-expense statements, and balance sheets are key skills that may be valuable. This section treats two major components of economic... 

The reconciliation between the cash flow statement and the income and expense statement is as follows. Start with the 40,000 from the last line in the cash flow statement, subtract 20,000 for the depreciation expense, and add back the 30,000 mortgage loan principal payment (not an allowed expense). The result is the net after-tax earnings. Figure B.ll is a set of statements from a small oil company. The statement of operations lists revenue and expenses, whereas the balance sheet lists various assets, liabilities, and stockholders equity ( net worth ). So-called capital items such as buildings, equipment, oil and gas property, and various intangibles are assets. Operating costs are deductions from revenues for operations not including expenditures for capital items. 

Sam Bell also would benefit by conducting a differential analysis as well as a pro forma analysis to fully realize the impact of Medicare Part D on his net profit. Examining the income-expense statements certainly suggests that Medicare Part D has decreased profits, but these analyses would provide useful information for Sam each year as he faces new contracts. 

Accountants regard assets as resources that have not yet been used up. Assets are normally shown on the balance sheet at cost minus accumulated depreciation. In this sense, the depreciation charge for an accounting period is the means of converting a part of an asset into a current expenditure that is then listed as an expense in the income statement. 

Income Statement Income statements range from the veiy simple presentation shown in Table 9-16 to the more informative and more complex presentation shown in Table 9-20. The income statement shows the revenue and the corresponding expenses that were incurred to earn that revenue over a period of time. It is the most obvious measure of the efficiency of a business. Although pubhshed income statements are normally for I-year periods, many companies use monthly income statements for internal purposes. 

Income statements are veiy useful tools to assist management in controlling a business and planning for the future. Since management needs to follow the trends of the normal expenses, extraordinaiy expenses such as those incurred as a result of a major fire or flood should be shown separately. 

One of the most important items in an income statement is depreciation expense. Although depreciation should not be thought of as a means to build up a fund to replace plant, it nevertheless does enable money to be retained in the business by reducing the profit available for distribution to stockholders. It is of course a duty of both accountants and management to see that sufficient money is retained in the business to replace assets and to invest such money in other processes or outside investment. 

Management and Cost Aeeounting In any given time period, cost may be divided into expired and unexpired cost. An expired cost is an expense an unexpired cost is an asset. This division is the basis for income statements and balance sheets. 

An income statement or profit-and-loss account gives the net annual profit A vp before tax. In order to assess the annual cash income Ac, as a source of funds from the value of the net annual profit A vp given in the income statement, it is necessary to add back all noncash expenses such as the balance-sheet annual depreciation charge Abd-This practice sometimes erroneously suggests that depreciation is a source of funds, whereas cash income is the only source of funds. 

Bubble Policy The bubble concept introduced under PSD provisions of the Clean Air Act Amendments of 1977 was formally proposed as EPA policy on Jan. 18, 1979, the final policy statement being issued on Dec. 11, 1979. The bubble pohcy allows a company to find the most efficient way to control a plant s emissions as a whole rather than by meeting individual point-source requirements. If it is found less expensive to tighten control of a pollutant at one point and relax controls at another, this woiild be possible as long as the total pollution from the plant woiild not exceed the sum of the current hmits on individual point sources of pollution in the plant. Properly apphed, this approach would promote greater economic efficiency and increased technological innovation. 

Tier 1 Hidden costs, such as monitoring expenses, reporting and record keeping, permitting requirements, environmental impact statements, legal, etc. 

First, achieving lower raw material cost than at present is always an important economic factor. When the price for one material comes down relative to another, the point at which we trade-off between the two materials changes because cost is a factor in most designs. That statement is not meant to imply that engineers are not concerned about cost in some designs, but we must emphasize that some particular structures have functional requirements as the most important issue. Can they or can they not do the job Cost is not the primary issue in that case. We would naturally like to have a less-expensive Space Shuttle, but can we do the job that the Space Shuttle is now doing with a lower-cost structure We could use less-expensive materials, but would they be able to hold up, would they survive reentry, and would the astronauts be able to survive If the astronauts would not be able to survive, then clearly you would acknowledge that we must pay the added cost to get the job done, i.e., to ensure their safety. 

We ve alluded to the fact that more accurate calculations come only at the expense of greater computational cost. In this section, we d like to make that statement more concrete. We ll also look at memory requirements for jobs involving f and higher basi.s functions. 

Document quote that states the selling price and other sales conditions of a material, product, etc. Did you know that by law if someone reports that verbally the vender made statements such as buy this injection molding machine and all you have to do is push a button to make good/acceptable parts ... the vender is in trouble... even if that vendor wins the case (odds are against winning), it will be very expensive to be in court. 

Narrow limits any statement based on a statistical test would be wrong very often, a fact which would certainly not augment the analyst s credibility. Alternatively, the statement would rest on such a large number of repeat measurements that the result would be extremely expensive and perhaps out of date. 

Section 2.5 discusses some experiences with expenses and benefits of simulation use and Section 2.6 will provide some technical information on available simulation software. The concluding Section 2.7 summarizes some of the aspects and contains statements on possible future lines of development. 

A matrix will be used to determine which resource can be used for the production of a product. The cost statement is some kind of penalty term. (Example the production of a product on a certain resource is more expensive than on another resource due to higher energy consumption.)... 

The third statement shown in Figure B. 10 is for income and expense that leads to net after-tax profits (earnings), a quantity that transfers to the balance sheet periodically in the category called equity. 

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