he following data were taken from the ledger for RAPHI Co. after adjustment on some items on December 31, 2021 the end of the fiscal year. Accounts Payable P 47,200 Accounts Receivable 64,300 Accumulated Depreciation - Office Equipment 22,750 Accumulated Depreciation - Store Equipment 62,100 Administrative Expenses 75,500 Randy Philips, Capital 141,750 Cash 39,700 Cost of Goods Sold 545,000 Randy Philips, Drawing 42,000 Interest Expense 9,000 Merchandise Inventory, Dec. 31, 2021 93,250 Merchandise Inventory, Jan. 1, 2021 75,000 Note Payable, Due 2024 50,000 Office Equipment 49,750 Prepaid Insurance 6,500 Rent Revenue 7,500 Sales Discounts 10,250 Salaries Payable 3,700 Sales Returns & Allowances 20,250 Sales 851,000 Selling Expenses 101,500 Store Equipment 125,000 Supplies 4,000 The following are the adjustments not taken for the year ended December 31, 2021 and charged to administrative expenses: Estimated bad debt using allowance method based on accounts receivable balance at 5%. Interest expense on Notes Payable (Bank notes) dated July 1, 2021 at 6% interest for 3 years. Prepare the financial statements for RAPHI Co. for the year ended December 31, 2021 and answer the following questions by providing the correct numeric figures. (Ignore peso sign) a) How much is RAPHI’s total purchases of for the year 2021? b) What is RAPHI’s net income or profit for year ended December 31, 2021? c) What is RAPHI’s gross profit on sales for year ended December 31, 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.
he following data were taken from the ledger for RAPHI Co. after adjustment on some items on December 31, 2021 the end of the fiscal year.
|
Accounts Payable |
P 47,200 |
|
|
64,300 |
|
|
22,750 |
|
Accumulated Depreciation - Store Equipment |
62,100 |
|
Administrative Expenses |
75,500 |
|
Randy Philips, Capital |
141,750 |
|
Cash |
39,700 |
|
Cost of Goods Sold |
545,000 |
|
Randy Philips, Drawing |
42,000 |
|
Interest Expense |
9,000 |
|
Merchandise Inventory, Dec. 31, 2021 |
93,250 |
|
Merchandise Inventory, Jan. 1, 2021 |
75,000 |
|
Note Payable, Due 2024 |
50,000 |
|
Office Equipment |
49,750 |
|
Prepaid Insurance |
6,500 |
|
Rent Revenue |
7,500 |
|
Sales Discounts |
10,250 |
|
Salaries Payable |
3,700 |
|
Sales Returns & Allowances |
20,250 |
|
Sales |
851,000 |
|
Selling Expenses |
101,500 |
|
Store Equipment |
125,000 |
|
Supplies |
4,000 |
The following are the adjustments not taken for the year ended December 31, 2021 and charged to administrative expenses:
- Estimated
bad debt using allowance method based on accounts receivable balance at 5%. - Interest expense on Notes Payable (Bank notes) dated July 1, 2021 at 6% interest for 3 years.
Prepare the financial statements for RAPHI Co. for the year ended December 31, 2021 and answer the following questions by providing the correct numeric figures. (Ignore peso sign)
a) How much is RAPHI’s total purchases of for the year 2021?
b) What is RAPHI’s net income or profit for year ended December 31, 2021?
c) What is RAPHI’s gross profit on sales for year ended December 31, 2021?
d) What is RAPHI’s total assets as of December 31, 2021?
e) What is RAPHI’s Capital balance as of December 31, 2021 after closing the nominal and temporary accounts?
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