The adjusted trial balance of Gobyerno Financial Couriers at June 30, 2022, the end of the company's fiscal year, follows: Gobyerno Financial Couriers Adjusted Trial Balance 30-Jun-22 Cash 193,500.00 Accounts Receivable 264,700.00 Supplies 12,900.00 Prepaid Insurance 32,000.00 Equipment 558,000.00 Accumulated Depreciation-Equipment 164,800.00 Building 1,449,000.00 Accumulated Depreciation-Building 168,500.00 Accounts Payable 384,000.00 Interest Payable 14,900.00 Wage Payable 7,700.00 Unearned Service Revenue 23,000.00 Note Payable-Long Term 970,000.00 Gobyerno, Capital 683,900.00 Gobyerno, Drawing 453,000.00 Service Revenue 1,098,600.00 73,000.00 Depreciation Expense-Equipment Depreciation Expense-Building 39,700.00 Wage Expense 188,000.00 Insurance Expense 31,000.00 Interest Expense 115,100.00 Utilities Expense 43,000.00 26,700.00 Property Tax Expense Supplies Expense 35,800.00 Total 3,515,400.00 3,515,400.00 Adjusting data at June 30, 2008, which have all been incorporated into the trial balance figures in the previous page: a. Depreciation for the year: equipment, P73,000; building, P39,700. b. Supplies used during the year, P35,800. c. Prepaid insurance expired during the year, P31,000. d. Accrued interest expense, P6,900. e. Accrued service revenue, P9,400. f. Unearned service revenue earned during the year, P77,900. g. Accrued wage expense, P7,700. Required: 1. Journalize the adjusting and closing entries. 2. Prepare Gobyerno Financial Couriers' income statement and statement of owners' equity for the year ended June 30, 2022, and the classified balance sheet on that date. Use the account format for the balance sheet.
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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