The following is extracted trial balance of Brahim Labi Sdn Bhd, after his first year’s trading, Brahim Labi Sdn Bhd Trial Balance as at 30 June 2020 Particulars Debit (RM) Credit (RM) Sales 265,900 Purchases 154,870 Rent 4,200 Lighting and heating expenses 530 Salaries and wages 51,400 Insurance 2,100 Buildings 85,000 Fixtures 1,100 Account receivable 31,300 Sundry expenses 412 Account payable 15,910 Cash at bank 14,590 Drawings 30,000 Vans 16,400 Motor running expenses 4,110 Capital 114,202 TOTAL 396,012 396,012 Inventory at 30 June 2020 was RM16,280. Required: i. Statement of Profit and Loss and Others Comprehensive Income for the year ended 30 June 2020. ii. Statement of Financial Position as at 30 June 2020
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.
2. The following is extracted
trading,
Brahim Labi Sdn Bhd
Trial Balance as at 30 June 2020
Particulars Debit (RM) Credit (RM)
Sales 265,900
Purchases 154,870
Rent 4,200
Lighting and heating expenses 530
Salaries and wages 51,400
Insurance 2,100
Buildings 85,000
Fixtures 1,100
Sundry expenses 412
Account payable 15,910
Cash at bank 14,590
Drawings 30,000
Vans 16,400
Motor running expenses 4,110
Capital 114,202
TOTAL 396,012 396,012
Inventory at 30 June 2020 was RM16,280.
Required:
i. Statement of
ended 30 June 2020.
ii.
Step by step
Solved in 2 steps with 2 images
