Notes to Consolidated Financial Statement Essay

Notes to Consolidated Financial Statement - Essay ExampleIn the statements of financial position, the Johnsons participation is kept separately from its owners. The owners equity is made as an independent entity in the statement of financial position and classified under liabilities. In the year ended 2003, the Johnsons phoner had total stockholders equity worth $900,082. Among this were 7% preferred stock worth $300,000, frequent stock worth $400,000 and additional paid-in capital worth $737,500.The going concern invention states that the firm mud in operation till the future. The business will continue running for a fairy ample time and that it has no intention of scaling down its operations. Therefore, preparation of statements of the financial position of The Johnsons Company is made under this concept. It is against this concept that it justifies charging disparagement over the entire life of an asset. The total accumulated depreciation of plant, property and equipment for The Johnsons Company in the year ended 2003 was worth $634,600.There is also the financial measurement concept. This concept states that accounting should be done only to those items that are measurable in monetary terms / monetary value can be attached. The Johnsons Company follows the monetary measurement concept by recording all its transactions and assets in monetary terms. This makes it easy to calculate profits and record the financial position of a business.The historical price concept assumes that assets are entered in books of accounting at the cost at which they were initially acquired. The Johnsons Company records its transactions while following the historical cost concept. All the assets are entered in the statements of financial position in their initial cost of acquisition.According to the accounting period concept, business life is divided into segments in order to study the results shown in financial statements by and by