The account of Jim Boy Trading Co. has the following balances on January 1, 2001 Jim Boy Trading Co. Trial Balance January 1, 2001 Debit 100,000 120,000 30,000 200,000 Accounts Credit Cash Accounts Receivable Inventory Equipment Accumulated Depreciation - Equipment Accounts Payable Notes Payable Jim Boy, Capital | Jim Boy, Drawing 80,000 20,000 100,000 300,000 50,000 500,000 Totals 500,000 The following were the transactions during the year. Use Periodic Inventory system. 1. Sales on cash basis amounted to P50,000 2. Sales on account amounted to P100,000 3. Purchases on account amounted to P80,000 4. Freight paid on purchases amounted to P5,000 5. Purchase returns amounted to P10,000 6. Purchase discount amounted to P2,000 7. Salaries Paid amounted to P25,000 8. Utility bills paid amounted to P10,000 9. Collection of accounts receivable amounted to P100,000 10. Payment of accounts payable amounted to P70,000 11. Owner drawings during the year totaled P40,000 12. Sales on account amounted to P150,000 13. Sales on cash amounted to P100,000 14. Sales returns amounted to P5,000 based on item 12. 15. Sales discount is P2,500 based on item 12. Required: 1. Journalize the above transactions using journal paper (no erasures) 2. Post to the general ledger using T accounts. (don't forget the beg. Balances above) 3. Prepare unadjusted trial balance on a Worksheet with proper heading
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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