Given the following information, construct the firm’s balance sheet: Cash and cash equivalents $ 400,000 Accumulated depreciation on plant and equipment 660,000 Plant and equipment 5,400,000 Accrued wages 260,000 Long-term debt 4,210,000 Inventory 7,080,000 Accounts receivable 5,430,000 Preferred stock 550,000 Retained earnings 8,680,000 Land 1,070,000 Accounts payable 2,030,000 Taxes due 170,000 Common stock $ 10 par Common shares outstanding 238,000 Current portion of long-term debt $ 440,000 Round your answers to the nearest dollar. Corporation X Balance Sheet as of XX/XX/XX Assets Liabilities and Owners' Equity Cash and cash equivalents $ Accounts payable $ Accounts receivable Taxes due Inventory Accrued wages Total current assets $ Current portion of long-term debt $ Land Total current liabilities Plant and equipment Long-term debt Preferred stock Common stock Retained earnings Total shareholders’ equity Total assets $ Total liabilities and shareholders’ equity
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.
Given the following information, construct the firm’s
| Cash and cash equivalents | $ | 400,000 |
| 660,000 | ||
| Plant and equipment | 5,400,000 | |
| Accrued wages | 260,000 | |
| Long-term debt | 4,210,000 | |
| Inventory | 7,080,000 | |
| Accounts receivable | 5,430,000 | |
| 550,000 | ||
| Retained earnings | 8,680,000 | |
| Land | 1,070,000 | |
| Accounts payable | 2,030,000 | |
| Taxes due | 170,000 | |
| Common stock | $ | 10 par |
| Common shares outstanding | 238,000 | |
| Current portion of long-term debt | $ | 440,000 |
Round your answers to the nearest dollar.
| Corporation X | ||||||
| Balance Sheet as of XX/XX/XX | ||||||
| Assets | Liabilities and Owners' Equity | |||||
| Cash and cash equivalents | $ | Accounts payable | $ | |||
| Accounts receivable | Taxes due | |||||
| Inventory | Accrued wages | |||||
| Total current assets | $ | Current portion of long-term debt | $ | |||
| Land | Total current liabilities | |||||
| Plant and equipment | Long-term debt | |||||
| Preferred stock | ||||||
| Common stock | ||||||
| Retained earnings | ||||||
| Total shareholders’ equity | ||||||
| Total assets | $ | Total liabilities and shareholders’ equity | $ | |||
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