 E-Newsletter Vol 5, Issue 9
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| Welcome! | |
This month we discuss the statement of cash flows and available funding for renewable energy projects. We also answer a client question regarding estimated accounting for bank loans in the "Ask the Firm" section of the newsletter! |
| Did you know . . . | |
Nearly 10.1 million Americans are self employed! |
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| Financial Statements: The Statement of Cash Flows | |
An often misunderstood and underutilized part of financial statements is the statement of cash flows, which can be especially useful. It basically tells you how your cash came in and where it went, and it consists of three parts:
- Operating activities - cash inflows and outflows from operating the business.
- Investing activities - cash inflows and outflows from buying and selling fixed assets, purchasing or selling investments or making loans.
- Financing activities - cash inflows and outflows from loan proceeds, repayment of debt principal, capital contributions and distributions to owners.
The cash flow statement can be misleading if not considered in conjunction with the balance sheet and income statement. The reason is that when additional cash is collected or a payment is made, the cash flow statement can change significantly.
For other considerations in reviewing the financial results please visit our blog or contact our office.
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$1.25 Million Available for Renewable Energy Projects | |
The Clean Energy Development Fund (CEDF) announced earlier this month that the CEDF Board has approved the allocation of an additional $1.25 million to support the installation of solar photovoltaic, solar thermal and small wind energy projects for home owners, communities, and businesses across Vermont through the Small Scale Renewable Energy Incentive Program.
Please visit the linked article at vermontbiz.com.
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Clients in the News | |
Congrats to our clients who have been making headlines!
The Vermont Specialty Food Association elected Bob Christoffel of Creative Labels as secretary-treasurer. http://www.vermontguides.com/2012/ha0812.html
Bob is not our main contact so please make sure that this one should be included
Christopher and Susan Grimes' historic Vermont inn, Stowehof Inn & Resort was showcased in the Business People Vermont's Business Travel Guide. http://www.vermontguides.com/tg/story2.html
Shearer Chevrolet in South Burlington is supporting South Burlington Recreation & Parks through the Chevrolet Youth Soccer Program. The sponsorship will include both monetary and equipment donations during the fall 2012 youth soccer season. http://www.burlingtonfreepress.com/article/20120809/BUSINESS08/308090006/1003/BUSINESS/Innovate-Good-Works-week-Aug-9
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| Staff Spotlight: Kelley Boyden | |
Kelley Boyden (kelley@dh-cpa.com)
- Position: Associate Accountant
- Memberships: Vermont Society of CPAs (VTCPA)
- Education: Saint Michael's College, Bachelors Degree in Accounting and Business Administration. Preparing to sit for CPA exam.
- Resides: Colchester, VT
- Quote: "You only live once, but if you do it right, once is enough" - Mae West
- Hobbies: Loves playing with her dog - Tucker, baking, home decorating, DIY activities, staying active, hiking, playing soccer and spending time with her family and friends.
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Q. "What is the best practice for bookkeeping of bank loans?"
For the answer to this question we referred to Kelley Boyden, Associate Accountant.
A. The best practice to account for bookkeeping of loans is to split the principle and interest. You should receive a monthly statement from your loan provider and it will include not only the total amount of your payment, but the break out of your payment between principle and interest. The principle is the amount by which you reduce your loan balance and the interest should be accounted for in an interest expense account. If you were to post a journal entry for the monthly payment you would hit the following three accounts as such.
Debit Credit
Loan $xxx.xx
Note: Reduce the loan balance by the principle amount shown on your monthly statement.
Interest Expense $xxx.xx
Note: Increase interest expense by the amount of interest shown on your statement.
Cash $xxx.xx
Note: Decrease cash by the total payment amount for the month.
Look for the following in next month's Q&A corner:
What is the best practice for keeping track of estimated tax payments? |
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Like us on Facebook | |
Be sure to check out the new firm page on Facebook: www.facebook.com/DavisHodgdonCPA. We are updating it weekly with new information, tips and tricks. "Like" our page and look for an upcoming contest to coincide with the launch of our new website this fall!
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Follow us on Twitter | |
Being a client and/or referral of Davis & Hodgdon Associates entitles you to the benefit of receiving up-to-the-minute information via Twitter that impacts you and your business, so become a follower today!
Not on Twitter yet? No problem... registration is easy and free. Simply visit www.twitter.com and set up your twitter account today.
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Subscribe to the Davis & Hodgdon Associates Blog | |
Subscribe to the Davis & Hodgdon Associates blog today and get access to information and resources posted weekly. Simply visit: http://blog.dh-cpa.com/ and enter your email address in the "Get Email Updates" field.
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$25 Gift Certificate
As a thank you for referring anyone who becomes a new client, we will give you a $25 gift certificate to a local area restaurant of your choice - - - just mention this ad.
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This E-Newsletter is published by Davis & Hodgdon Associates CPAs as a service for clients, business associates and friends. Recipients should not act on the issues presented without seeking prior professional advice. Additional guidance regarding information contained herein may be obtained by contacting Davis & Hodgdon Associates CPAs at (802) 878-1963. Internal Revenue Service Circular 230 Disclosure. Pursuant to Internal Revenue Service Circular 230, we hereby inform you that the advice set forth herein with respect to U.S. federal tax issues was not intended or written by Davis & Hodgdon Associates CPAs to be used, and cannot be used, by you or any taxpayer, for the purpose of (i) avoiding any penalties that may be imposed on you or any other person under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. | |
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