Financial info to be used by surnames with initials (S, W, G, Z) Simple Things Industries Ltd. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/(Decrease) Assets Cash 175,000 15,000 ? Accounts Receivable 230,000 220,000 ? Inventories 310,000 340,000 ? Prepaid expenses 30,000 10,000 ? Intangible assets 105,000 105,000 ? Equipment, net 860,000 830,000 ? Total Assets 1,710,000 1,520,000 Liabilities Accounts payable 90,000 140,000 ? Accrued liabilities 190,000 160,000 ? Income tax payable 120,000 140,000 ? Long-term notes payable 360,000 450,000 ? Stockholders' Equity Common Stock 400,000 250,000 ? Retained earnings 640,000 400,000 ? Treasury stock (90,000) (20,000) ? Total liabilities and stockholders' equity 1,710,000 1,520,000 Simple Things Industries Ltd Income Statement Year Ended December 31,2014 Revenues and gains: Sales revenue 1,900,000 Gain on sale of equipment 20,000 Total revenues and gains 1,920,000 Expenses Cost of goods sold 850,000 Depreciation expense 190,000 Other operating expense 360,000 Total expenses 1,400,000 Income before income taxes 520,000 Income tax expense 180,000 Net Income 340,000 Notes Acquisition of plant asset during 2014 320,000 Sale proceed from sale of equipment 120,000 Receipt for issuance of notes payable 10,000 Payment for note payable 100,000 Dividend paid 100,000 Book value of equipment sold 100,000 Reconstruct the company's comparative balance sheet for 2013/2014 and compute and show the missing figures to include the appropriate sign as a positive or negative figure. which category of the statement of cash flow is considered as the most important? why? prepare a complete statement of cash flows for 2014 using the indirect method
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.
Financial info to be used by surnames with initials (S, W, G, Z)
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Simple Things Industries Ltd. |
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Comparative Balance Sheet |
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December 31, 2014 and 2013 |
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2014 |
2013 |
Increase/(Decrease) |
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Assets |
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Cash |
175,000 |
15,000 |
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Accounts Receivable |
230,000 |
220,000 |
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Inventories |
310,000 |
340,000 |
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Prepaid expenses |
30,000 |
10,000 |
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Intangible assets |
105,000 |
105,000 |
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Equipment, net |
860,000 |
830,000 |
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Total Assets |
1,710,000 |
1,520,000 |
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Liabilities |
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Accounts payable |
90,000 |
140,000 |
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Accrued liabilities |
190,000 |
160,000 |
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Income tax payable |
120,000 |
140,000 |
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Long-term notes payable |
360,000 |
450,000 |
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Common Stock |
400,000 |
250,000 |
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640,000 |
400,000 |
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(90,000) |
(20,000) |
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Total liabilities and stockholders' equity |
1,710,000 |
1,520,000 |
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Simple Things Industries Ltd |
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Income Statement |
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Year Ended December 31,2014 |
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Revenues and gains: |
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Sales revenue |
1,900,000 |
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Gain on sale of equipment |
20,000 |
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Total revenues and gains |
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1,920,000 |
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Expenses |
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Cost of goods sold |
850,000 |
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190,000 |
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Other operating expense |
360,000 |
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Total expenses |
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1,400,000 |
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Income before income taxes |
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520,000 |
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Income tax expense |
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180,000 |
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Net Income |
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340,000 |
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Notes |
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Acquisition of plant asset during 2014 |
320,000 |
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Sale proceed from sale of equipment |
120,000 |
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Receipt for issuance of notes payable |
10,000 |
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Payment for note payable |
100,000 |
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Dividend paid |
100,000 |
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Book value of equipment sold |
100,000 |
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Reconstruct the company's comparative balance sheet for 2013/2014 and compute and show the missing figures to include the appropriate sign as a positive or negative figure.
which category of the statement of cash flow is considered as the most important? why?
prepare a complete statement of
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