From the following trial balance of Ayesha, draw up a Statement of Comprehensive Income for the year ended 30 September 20X9, and a Statement for financial position as at that date. Dr Cr Rs Rs Stock 1 October 20X8 41,600 Carriage outwards 2,100 Carriage inwards 3,700 Returns inwards 1,540 Returns outwards 3,410 Purchases 188,430 Sales 380,400 Salaries and wages 61,400 Warehouse rent 3,700 Insurance 1,356 Motor expenses 1,910 Office expenses 412 Lighting and heating expenses 894 General expenses 245 Premises 92,000 Motor vehicles 13,400 Fixtures and fittings 1,900 Debtors 42,560 Creditors 31,600 Cash at bank 5,106 Drawings 22,000 Capital 68,843 484,253 484,253 Stock at 30 September 20X9 was Rs44,780.
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.
Question # 7
From the following
Dr Cr
Rs Rs
Stock 1 October 20X8 41,600
Carriage outwards 2,100
Carriage inwards 3,700
Returns inwards 1,540
Returns outwards 3,410
Purchases 188,430
Sales 380,400
Salaries and wages 61,400
Warehouse rent 3,700
Insurance 1,356
Motor expenses 1,910
Office expenses 412
Lighting and heating expenses 894
General expenses 245
Premises 92,000
Motor vehicles 13,400
Fixtures and fittings 1,900
Debtors 42,560
Creditors 31,600
Cash at bank 5,106
Drawings 22,000
Capital 68,843
484,253 484,253
Stock at 30 September 20X9 was Rs44,780.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
