The University of the West Indies

Department of Computing and Information Technology

INFO1507 Introduction to Business Principles
Financial Accounting
________________________________________________________

The following financial information is from Allstate Corporation, a competitor of

Berkshire Hathaways GEICO Insurance, for the year ended December 31, 2007 ($
millions).

Cash, ending year

.
Cash flows from operations
..
Revenues

...
Stockholders equity
..
Cash flows from financing
..
Total liabilities
...
Expenses

Noncash assets
..
Cash flows from investing
..
Net income
..
.
Cash, beginning year
..

$
422
5, 433
36, 769

21, 851
(5, 339)
134, 557
32, 133

155, 986
(115)
4, 636

443

All material adapted from Module 1 of Financial Accounting for MBAs 4 th edition by Easton et
al. 2010

1. Prepare an income statement and balance sheet for Allstate at December 31,
2007.
2. Compare the balance sheet and income statement of Allstate to those of
Berkshire Hathaway in Exhibits 1 and 2 below. What differences do we
observe?

All material adapted from Module 1 of Financial Accounting for MBAs 4 th edition by Easton et
al. 2010

Exhibit 1: Balance Sheet ($ millions)

BERKSHIRE HATHAWAY
Balance Sheet
December 31, 2007
$
Assets
Cash

..
Noncash assets
..
Total assets
..
Liabilities and equity
Total liabilities
...
Equity

..
Contributed capital
.
Retained earnings
...
Other equity

Total equity
.
Total liabilities and equity
.

44, 329

228, 831
273, 160

149, 759

26, 960
72, 153
24, 288
123, 401
273, 160

Exhibit 2: Income statement ($ millions)

BERKSHIRE HATHAWAY
Income Statement
For Year Ended December 31, 2007
Revenues

...

$
118, 245

All material adapted from Module 1 of Financial Accounting for MBAs 4 th edition by Easton et
al. 2010

Expenses

Net income (loss)

.

105, 032

13, 213

All material adapted from Module 1 of Financial Accounting for MBAs 4 th edition by Easton et
al. 2010