Instruction: From the following partial worksheet of Atty. Villanueva for six-month period ended December 31, 2019, prepare the financial statement in good fom.
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.
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MODULE-7-Learning-Activities.pdf - Read-only
Interest Receivable
24. Interest Income
25. Accrued Salaries Expense
23.
1
Matn Campu Alcate, Victoria
Bongabong Campus, Labanan, Bongabong
Calapan Caty Campus Maripet, Calapan City
PRACTICAL EXERCISE 2
Instruction: From the following partial worksheet of Atty. Villanueva for six-month period ended December 31,
2019, prepare the financial statement in good form.
Trial Balance
Debit
Credit
Income Statement
Debit
Credit
Balance Sheet
Debit
Credit
Cash on Hand
Cash in Bank
Accounts Receivable
40,000
50,000
30,000
10,000
20,000
15,000
40,000
50,000
30,000
10,000
20,000
15,000
Note Receivable
Prepaid Insurance
Flepalo
Office Furniture
Accounts Payable
Notes Payable
M. Capital
M. Drawing
20,000
10,000
77,000
20,000
10,000
77,000
5,000
5,000
150,000
Service Income
Salaries Expense
Supplies Expense
Taxes and Licenses
Rent Expense
Interest Expense
Bad Debts
Allowance for Bad Debts
Depreciation Expense
Accumulated Depreciation - Furniture
Insurance Expense
Unused Supplies
Interest Income
150,000
36,000
8,000
5,000
24,000
2,000
3,000
36,000
8,000
5,000
24,000
2.000
3,000
3,000
3,000
1.500
1,500
1,500
1,500
10,000
10,000
3,000
3,000
1,000
262,500
262,500
89,500 151,000 173,000 111,500
Net Income
61,500
151,000 151,000 173,000 173,000
61,500
Total
2 of 2
2
Main Campua Alcate, Victoria
Bongabong Campur, Labasan, Bongabong
Calapan City Campus Maripit, Calapan City
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