Accounting at Maccloud Winery

Assets are anything the company owns that has future value. Examples include cash, property, equipment, accounts receivable and investments. Copyrights, trademarks and patents are also considered assets. Liabilities are items or things the company owes. Some examples are accounts payable or yearly payroll and business lease costs. At Berkshire Hathaway, the two largest current liabilities at the end of its two most recent annual reporting periods are losses and loss adjustment expenses and accounts payable, accruals and other liabilities. The company’s total liabilities at the end of its two most recent annual reporting periods was (in millions), $161,334 in 2009 and $153,692 in 2008. Revenue is the amount of money a company receives during a specific period with other business and customers. Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold (BKS, 2009). BHI’s revenues, or net revenues, for the last three annual reporting periods were (dollars in millions), $112,493 in 2009, $107,786 in 2008 and $118,245 in 2007.

This annual report consists of two parts: management’s discussion and analysis (this section) and the basic financial statements. The basic financial statements include a series of financial statements. The Statement of Net Assets and the Statement of Activities (on pages and ) provide information about the activities of the [type of entity] as a whole and present a longer-term view of the [type of entity]’s

income statements and balance sheets, comparative income statements and balance sheets, and various financial statement ratios such as

cognizant of the fact that the choices he makes can affect the price a buyer pays

* Statement of net assets (Balance sheet) presentation required classification of current and non-current of assets and liabilities. Equity section presents: Net Assets Invested in Capital Assets, Care Organizations Net of Related Debt, Restricted Net Assets, and Unrestricted Net Assets.

Because it is a future incurred payment and they might not know if the lease will continue after the 5 year lease, they have to:

Topic Allowed income and deductions Deductions for and from AGI Deductions for and from AGI Deductions for and from AGI Deductions for and from AGI Deductions for and from AGI Deductions for and from AGI; deductions disallowance Ordinary and necessary requirement Reasonable compensation Business versus nonbusiness losses Reporting procedures Method of accounting: cash basis Prepayment provision for cash basis taxpayer All events and economic performance

Items of value to a company such as equipment or supplies needed for running an efficient business are called an asset. A liability is when a company owes for a service or pay for employees. After a liability is subtracted from an asset this becomes the owners interest in the company or owners’ equity. Regardless of the standards followed by accountants, they will always classify accounts into these three categories resulting in the Accounting Equation: (Editorial Board, 2012, p. 9- 10)

* Net Operating Income (NOI), Cash Flow from Operations (CFO) and Cash Flow after Financing (CFAF)

Cash flow is one of the most important aspects of running any business whether large or small. It is one of the single most important reasons why many businesses fail, this does not matter whether how good a business is. Managing a cash flow therefore is vitally important in the smooth running survival and success of a business.

Profit available less Dividends Retained profits Capital Owners' equity Loan from Carter Other liabilities Accum depreciation

Classify each of the items as an asset, liability; revenue; or expense from the company's viewpoint. Also indicate the normal account balance of each item.

10. Fixed asset turnover = Total Revenues in Statement of Operations / Net Property and

Property, Plant & Equipment (PPE) (AASB 116): “Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item including borrowing costs that are related to the

The last one is the Balance Sheet which tells a person the lists of assets he has, the list of