Financial Statements Steven Company has provided the following information for the most recent quarter, January 1 through March 31 of 2020. Prepare a multiple-step Income Statement and the Asset section of a classified Balance Sheet, including the correct headings. Specific Account Balance Specific Account Balance Accounts Payable 45 Interest Revenue 26 Accounts Receivable 204 Interest Payable 6 Accumulated Depreciation (Buildings) 45 Inventory 112 Accumulated Depreciation (Equipment) 11 Land 218 Allowance for Doubtful Accounts 22 Loss on Sale of PPE 14 Bad Debt Expense 18 Notes Payable (maturity of less than 1 yr) 60 Bank Fees Expense 2 Notes Payable (maturity of more than 1 yr) 83 Buildings 255 Retained Earnings (beginning) 180 Cash 188 Salaries Expense 25 Common Stock 306 Salaries Payable 47 Cost of Goods Sold 560 Sales Discounts 8 Depreciation Expense 20 Sales Returns & Allowances 23 Dividends 48 Sales Revenue 1,125 Equipment 135 Supplies 9 Freight-Out 7 Supplies Expense 15 Income Tax Expense 138 Unearned Sales Revenue 41 Insurance Payable 2 Prepare, in good form, the multiple-step Income Statement for Steven Company for the most recent quarter, January 1 through March 31, 2020. (You can receive partial credit)
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 Statements
Steven Company has provided the following information for the most recent quarter, January 1 through March 31 of 2020. Prepare a multiple-step Income Statement and the Asset section of a classified Balance Sheet, including the correct headings.
|
Specific Account |
Balance |
Specific Account |
Balance |
|
Accounts Payable |
45 |
Interest Revenue |
26 |
|
Accounts Receivable |
204 |
Interest Payable |
6 |
|
Accumulated |
45 |
Inventory |
112 |
|
Accumulated Depreciation (Equipment) |
11 |
Land |
218 |
|
Allowance for Doubtful Accounts |
22 |
Loss on Sale of PPE |
14 |
|
|
18 |
Notes Payable (maturity of less than 1 yr) |
60 |
|
Bank Fees Expense |
2 |
Notes Payable (maturity of more than 1 yr) |
83 |
|
Buildings |
255 |
|
180 |
|
Cash |
188 |
Salaries Expense |
25 |
|
Common Stock |
306 |
Salaries Payable |
47 |
|
Cost of Goods Sold |
560 |
Sales Discounts |
8 |
|
Depreciation Expense |
20 |
Sales Returns & Allowances |
23 |
|
Dividends |
48 |
Sales Revenue |
1,125 |
|
Equipment |
135 |
Supplies |
9 |
|
Freight-Out |
7 |
Supplies Expense |
15 |
|
Income Tax Expense |
138 |
Unearned Sales Revenue |
41 |
|
Insurance Payable |
2 |
|
|
Prepare, in good form, the multiple-step Income Statement for Steven Company for the most recent quarter, January 1 through March 31, 2020. (You can receive partial credit)
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