Present entries in general journal form to record the following summarized operations related to production for The John Kinky Toy Company. Please use the following chart of accounts for questions 31 to 41: 10 Cash 20 Accounts Payable 11 Accounts Receivable 21 Wages Payable 12 Materials 22 Plant Taxes Payable 13 Work in Process 30 Common Stock 14 Prepaid Factory Insurance 35 Retained Earnings 15 Finished Goods Inventory 40 Sales 16 Plant 50 Cost of Goods Sold 17 Accumulated Depreciation 70 Factory Overhead ***It is very important that you use the above accounts. Do not use commas or dollar signs ($) in your answer. Direct materials requisitioned for production, $50,000. Date Debit Credit $50,000 $50,
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.
Present entries in general journal form to record the following summarized operations related to production for The John Kinky Toy Company. Please use the following chart of accounts for questions 31 to 41:
|
10 |
Cash |
20 |
Accounts Payable |
|
11 |
|
21 |
Wages Payable |
|
12 |
Materials |
22 |
Plant Taxes Payable |
|
13 |
Work in Process |
30 |
Common Stock |
|
14 |
Prepaid Factory Insurance |
35 |
|
|
15 |
Finished Goods Inventory |
40 |
Sales |
|
16 |
Plant |
50 |
Cost of Goods Sold |
|
17 |
Accumulated |
70 |
Factory Overhead |
***It is very important that you use the above accounts. Do not use commas or dollar signs ($) in your answer.
Direct materials requisitioned for production, $50,000.
|
Date |
|
Debit |
Credit |
|
|
$50,000 |
|
|
|
|
|
|
$50, |
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