The following accounts are taken from the records of Shore Corporation. Unless otherwise indicated, they are the balances as of December 31, 2020. Interest receivable 1,200 Miscellaneous administrative expense 7,500 Allowance for doubtful accounts 8,450 Office supplies expense 10,000 Miscellaneous selling expense 14,000 Interest expense 21,000 Store supplies expense 21,000 Paid in capital from treasury shares Delivery expense 28,000 30,000 De preciation expense-office building & equipment 30,000 Interest revenue 30,000 Prepaid expenses 42,070 Income tax payable 44,000 Office rent expense 50,000 Share premium - preference 70,000 De pre ciation expense-store building &equipment 100,000 Cash dividends for preferred shares 100,000 Advertising expense Treasury shares 150,000 150,000 Cash dividends for ordinary shares Office salaries expense 155,150 170,000 Sales commission 185,000 Accounts payable 194,300 Share premium - ordinary 200,000 Cash 282,850 Sales salaries expense 385,000 Bonds payable 500,000 Accounts receivable 545,000 Inventory - December 31, 2020 778,000
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.
for the attached comprehensive problem, please make statement of equity (SCE)
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