accountant counted everything thất was in the warehouse as of February 28, which resulted in an ending inventory va $45,000. However, she didn't know how to treat the following transactions so she didn't record them. Ma1) For each of the transactions below, specify whether the item in question should be included in ending inventory, and if so amount (If item is not included in the ending inventory, then enter O for the amounts.) (a) On February 26, Crane shipped to a customer goods costing S600. The goods were shipped FOB shipping point, and the receiving report indicates that the customer received the goods on March 2. (b) On February 26, Martine Inc shipped goods to Crane FOB destination. The invoice price was $300 plus $15 for freight. The receiving report indicates that the goods were received by Crane on March 2. (c) Crane had $350 of inventory at a customer's warehouse "on approval." The customer was going to let Crane know whether it wanted the merchandise by the end of the week, March 4. (d) Crane also had $250 of inventory at a Belle craft shop, on consignment from Crane. (e) On February 26, Crane ordered goods costing S700. The goods were shipped FOB shipping point on February 27. Crane received the goods on March 1. On February 28, Crane packaged goods and had them ready for shipping to a customer FOB destination. The invoice price was $300 plus $15 for freight; the cost of the items was $240. The receiving report indicates that the goods were received by the customer on March 2 Crane had damaged goods set aside in the warehouse because they are no longer saleable. These goods originally cost $400 and, originally. %24 %24
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
