Lawson Consulting, which began operations on December 1, had the following accounts and amounts on December 31. The I. Lawson, Capital account balance at December 1 was $0 and the owner invested $21,680 cash in the company on December 2. On December 31, the company's accounts and amounts for the month of December are shown in the table below: $ 14,000 I. Lawson, Withdrawals 6,300 Services revenue 8,300 Rent expense 4,620 Wages expense 21,680 Cash Accounts receivable Equipment Accounts payable I. Lawson, Capital Use the above information to prepare a December 31 balance sheet for Lawson Consulting. Hint: The ending I. Lawson, Capital account balance as of December 31 is $23,980. %24
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.
![Required information
[The following information applies to the questions
displayed below.]
Lawson Consulting, which began operations on December 1,
had the following accounts and amounts on December
31. The I. Lawson, Capital account balance at December 1
was $0 and the owner invested $21,680 cash in the
company on December 2. On December 31, the company's
accounts and amounts for the month of December are
shown in the table below:
$ 14,000 I. Lawson, Withdrawals
6,300 Services revenue
8,300 Rent expense
4,620 Wages expense
21,680
Cash
$ 3
Accounts receivable
17
Equipment
Accounts payable
I. Lawson, Capital
3
Use the above information to prepare a December 31
balance sheet for Lawson Consulting. Hint: The ending I.
Lawson, Capital account balance as of December 31 is
$23,980.
LAWSON CONSULTING
Balance Sheet
Accounts receivable
Accounts payable
Total equity
2$
2$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F387f8ada-78e7-49d8-990b-48a87981f1ab%2F87675234-4ef1-43b6-bae7-8762f6e9140a%2Fipl5f7r_processed.jpeg&w=3840&q=75)
![equired information
"he following information applies to the questions
isplayed below.]
awson Consulting, which began operations on December 1,
ad the following accounts and amounts on December
I. The I. Lawson, Capital account balance at December 1
as $0 and the owner invested $21,680 cash in the
ɔmpany on December 2. On December 31, the company's
ccounts and amounts for the month of December are
nown in the table below:
$ 14,000 I. Lawson, Withdrawals
6,300 Services revenue
8,300 Rent expense
4,620 Wages expense
21,680
$ 3,300
17,400
3,800
8,000
Cash
Accounts receivable
Equipment
Accounts payable
I. Lawson, Capital
ie above information to prepare a December 31
ce sheet for Lawson Consulting. Hint: The ending I.
in, Capital account balance as of December 31 is
80.
LAWSON CONSULTING
Balance Sheet
s receivable
s payable
Total equity
2$
2$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F387f8ada-78e7-49d8-990b-48a87981f1ab%2F87675234-4ef1-43b6-bae7-8762f6e9140a%2Fa2uv95_processed.jpeg&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
