Post closing balance debit credit Non current assets 1 414 000 Current assets 412 000 Ordinary share capital 1 300 000 Retained earnings 272 400 Non current liabilities 180 000 Current liabilities 74 000 1 826 400 1 826 400 Until June 20x2, 1 300 000 ordinary shares had been issued, for N$1 each. The following equity transaction took place during the year ended 30 June 20x3 On 1 July 20x2, the company issued 200 000 12% preference shares for N$1.25 each. Share issue costs of N$6 150 were incurred and paid. On 30 September 20x2 the company issued 300 000 ordinary shares for N$1.25 per share. Share issue costs of N$15 625 were incurred and paid. On 30 December 20x2 the directors authorized and declared a ordinary dividend of 50 cents per share. The profit for the period ended 30 June 20x3 amounted to N$112 800. On June 20x3 the directors authorized a capitalization of one ordinary share of N$ for every 8 held, The preference dividend was paid on due date. All share issue expenses should b written off. How to calculate the balance of ordinary share capital as at 30 June 20x3?
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.
| Post closing balance | ||
| debit | credit | |
| Non current assets | 1 414 000 | |
| Current assets | 412 000 | |
| Ordinary share capital | 1 300 000 | |
| 272 400 | ||
| Non current liabilities | 180 000 | |
| Current liabilities | 74 000 | |
| 1 826 400 | 1 826 400 |
Until June 20x2, 1 300 000 ordinary shares had been issued, for N$1 each.
The following equity transaction took place during the year ended 30 June 20x3
On 1 July 20x2, the company issued 200 000 12%
How to calculate the balance of ordinary share capital as at 30 June 20x3?
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