4. The trial balance below was extracted from the books of CiciCaca Enterprise as at 31 Mac 2020: Particulars Debit Credit RM RM Purchases and Sales Plant and machinery Vehicles Land and building Accumulated depreciation: Plant and machinery Vehicles Discount allowed and discount received Returns inwards and returns outwards Carriage inwards Carriage outwards Custom duties Drawings Provision for doubtful debts 950,000 377,000 432,000 102,000 625,000 175,000 39,000 760 12,200 1,500 44,000 4,700 5,500 15,400 3,600 2,000 Salaries Electricity and water Rent and rates Insurance 300,000 65,000 4,000 55,000 and wages Mortgage on land and building Repairs and maintenance Commission earned Accounts receivables Account payable Inventory - 1 April 2019 Cash at bank Capital 450.000 6,300 95,000 187,000 166,500 51,000 41,100 429,640 2,320,100 2,320,100 TOTAL The following additional information is to be taken into consideration: i. Increase in provision for doubtful debts to RM3,610 ii. Depreciation for the year: a. Plant and machinery b. Vehicles ii. Accrued expenses: a. Rent and rates b. Electricity and water iv. Expenses paid in advance: Salaries and wages 5/8 RM25,700 RM15,300 RM1,000 RM4,800 a. RM4,500 b. Insurance RM5,000 V. Inventory on 31 Mac 2020 was RM42,800. Required: Prepare the Statement Profit or Loss and Other Comprehensive Income for the year ended 31 Mac 2020. b) a) Prepare the Statement of Financial Position as at 31 Mac 2020.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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