The problem to be resolved: The following unadjusted trial balance was extracted from the books of KT Supplies at June 30th, 2021. The company is owned by Karen Thompson and trades in the buying and selling of household supplies. KT Supplies Trial Balance as at June 30, 2021 A/C Name DR $ CR $ Cash 405,670 Accounts Receivable 2,037,100 Merchandise Inventory 660,500 Store Supplies 403,930 Prepaid Rent 165,000 Furniture and Fixtures 1,200,000 Accumulated Depreciation –Furniture and Fixtures 360,000 Accounts Payable 1,046,340 Insurance Payable Utilities Payable Unearned Sales Revenue 348,500 Note Payable-Long Term 350,000 Karen Thompson, Capital 2,105,000 Karen Thompson, Withdrawal 248,000 Sales Revenue Earned 4,316,280 Sales Discount 100,300 Sales Returns and Allowances 80,200 Cost of Goods Sold 1,171,770 Salaries Expense 802,750 Rent Expense 605,000 Depreciation Expense – Furniture and Fixtures Utilities Expense 418,000 Store Supplies Expense Insurance Expense Bad Debt Expense 105,000 Travelling Expense 102,000 Interest Expense 20,900 Total 8,526,120 8,526,120 The following additional information was made available at June 30th, 2021 a) Store supplies used during the year amounted to $200,580. b) $55,000 of the prepaid rent has expired as at June 30th, 2021. c) Unearned sales revenue still not earned, $200,400. The Company expects to earn this amount during January 2022. d) The Furniture and Fixtures has an estimated life of ten (10) years and is being depreciated on the straight-line method of depreciation, down to a residual value of $0. e) Insurance expenses not paid as at June 30th, 2021 amounted to $130,000. f) Accrued utilities expense amounted to $38,000 at June 30th, 2021. g) A physical count of inventory at June 30th 2021, reveals $665,500 worth of inventory on hand. Other Data: h) $250,000 of the notes payable is due for payment on December 31st, 2021. Requirements: 1. Prepare the necessary adjusting entries on June 30th, 2021 2. Prepare the company’s multiple-step income statement for the year ended June 30th, 2021. 3. Prepare the company’s statement of owner’s equity for the year ended June 30th, 2021
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.
The problem to be resolved:
The following unadjusted
KT Supplies
Trial Balance as at June 30, 2021
A/C Name DR $ CR $
Cash 405,670
Merchandise Inventory 660,500
Store Supplies 403,930
Prepaid Rent 165,000
Furniture and Fixtures 1,200,000
Accumulated
Accounts Payable 1,046,340
Insurance Payable
Utilities Payable
Unearned Sales Revenue 348,500
Note Payable-Long Term 350,000
Karen Thompson, Capital 2,105,000
Karen Thompson, Withdrawal 248,000
Sales Revenue Earned 4,316,280
Sales Discount 100,300
Sales Returns and Allowances 80,200
Cost of Goods Sold 1,171,770
Salaries Expense 802,750
Rent Expense 605,000
Depreciation Expense – Furniture and Fixtures
Utilities Expense 418,000
Store Supplies Expense
Insurance Expense
Travelling Expense 102,000
Interest Expense 20,900
Total 8,526,120 8,526,120
The following additional information was made available at June 30th, 2021
a) Store supplies used during the year amounted to $200,580.
b) $55,000 of the prepaid rent has expired as at June 30th, 2021.
c) Unearned sales revenue still not earned, $200,400. The Company expects to earn this amount during January 2022.
d) The Furniture and Fixtures has an estimated life of ten (10) years and is being depreciated on the straight-line method of depreciation, down to a residual value of $0.
e) Insurance expenses not paid as at June 30th, 2021 amounted to $130,000.
f) Accrued utilities expense amounted to $38,000 at June 30th, 2021.
g) A physical count of inventory at June 30th 2021, reveals $665,500 worth of inventory on hand.
Other Data:
h) $250,000 of the notes payable is due for payment on December 31st, 2021.
Requirements:
1. Prepare the necessary
2. Prepare the company’s multiple-step income statement for the year ended June 30th, 2021.
3. Prepare the company’s statement of owner’s equity for the year ended June 30th, 2021
4. Prepare the company’s classified balance sheet at June 30th, 2021
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hi based on the above question would item h) $250,000 of the notes payable is due for payment on December 31st, 2021, would this be reflected in the jounal entry? if so how do I enter it on the
by Bartleby ExpertThe problem to be resolved:
The following unadjusted
KT Supplies
Trial Balance as at June 30, 2021
A/C Name DR $ CR $
Cash 405,670
Merchandise Inventory 660,500
Store Supplies 403,930
Prepaid Rent 165,000
Furniture and Fixtures 1,200,000
Accounts Payable 1,046,340
Insurance Payable
Utilities Payable
Unearned Sales Revenue 348,500
Note Payable-Long Term 350,000
Karen Thompson, Capital 2,105,000
Karen Thompson, Withdrawal 248,000
Sales Revenue Earned 4,316,280
Sales Discount 100,300
Sales Returns and Allowances 80,200
Cost of Goods Sold 1,171,770
Salaries Expense 802,750
Rent Expense 605,000
Depreciation Expense – Furniture and Fixtures
Utilities Expense 418,000
Store Supplies Expense
Insurance Expense
Travelling Expense 102,000
Interest Expense 20,900
Total 8,526,120 8,526,120
The following additional information was made available at June 30th, 2021
a) Store supplies used during the year amounted to $200,580.
b) $55,000 of the prepaid rent has expired as at June 30th, 2021.
c) Unearned sales revenue still not earned, $200,400. The Company expects to earn this amount during January 2022.
d) The Furniture and Fixtures has an estimated life of ten (10) years and is being depreciated on the straight-line method of depreciation, down to a residual value of $0.
e) Insurance expenses not paid as at June 30th, 2021 amounted to $130,000.
f) Accrued utilities expense amounted to $38,000 at June 30th, 2021.
g) A physical count of inventory at June 30th 2021, reveals $665,500 worth of inventory on hand.
Other Data:
h) $250,000 of the notes payable is due for payment on December 31st, 2021.
Requirements:
1. Prepare the company’s classified
by Bartleby Expert
