Statement of Comprehensive Income Statement of Financial Position For the month ended July 31,2020 As of July 31,2020 ASSE TS Php 72,710 Allowances (1,320) (825) Sales Less: Sales Returns and Less: Sales DisCount Net Sales: Less: Cost of Goods Sold Gross Profit Operating Expenses: Selling Expenses Salaries Expense General and Adminis trative Expenses: Utilities Expenses Rental Expenses Depreciation Expenses Total Expense: Current Assets 91,525 30,140 20,050 25,000 Cash account receivable Inventory Prepaid expenses Total current assets (a) Non-current assets: Office equipm ent Less: accumulated depreciation Total non-curr ent asset (b) Total a ssets Liab ilities & shareholders' equity Current liabilities: Account payable Salari es payable Total liabiliti es (c) Shareholders' equity: Sy, capital Add netincome 70,565 (32,450) 38,115 166,715 45,000 (750) (14,000) 44,250 210,965 (7,400) (5,000) (750) 3,000 7,000 (27,150) Net Income: 10,965 10,000 200,000 10,965
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.
Create the statement of
Transactions:
July 1 Winnie Sy made initial contribution to the
business by depositing money in the
company’s bank account. Amount 200,000
July 1 Purchased laptop from Computershop Inc.
for office use. Amount 45,000
Payment term: COD (Cash on Delivery).
July 2 Paid advance rental for 6 months. Amount 30,000
July 4 Received 200 reams of bond papers
(inventory) ordered from Jude Corp. Amount 25,000
Payment terms: 2/10, n/30.
July 7 Delivered150 reams of bond papers to
Aurora Company. Amount 41,250
Payment terms: 2/10, n/20.
Cost of merchandise was P18,750.
July 8 Paid the July 4 purchases 24,500
July 15 Paid salary of employee. Amount 7,000
July 16 Received payment from the July 7 sales. Amount 40,425
July 18 Sold 20 reams of bond papers to Audrey
Company. Audrey picked up the
merchandise from the store. Amount 5,500
Payment term: 15 days.
Cost of merchandise was P2,500.
July 19 Received10 boxes of ballpoint pens from
Mickey Inc. Amount 25,000 Payment terms: COD
July 22 Over the counter sale of 4 boxes of
ballpoint pens to Happy Company. Amount 22,000
Payment term: Cash
Cost of merchandise was P 10,000
July 23 Received 10 calculators from Plusminus
Corporation. Amount 3,000 Payment terms: 30 days.
July 24 Sold 6 calculators to Joel Company.
picked up the merchandise from the store. Amount 3,960
Payment Term: 15 days.
Cost of merchandise was P1,800
July 25 Paid electricity bill. Amount 7,400
July 26 Received 2 defective calculators from Joel
Company. Amount 1,320. Cost of defective calculators is
600
July 31 Over the counter cash withdrawal by the
owner, Winnie Sy, for her personal
expenses. Amount 10,000
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