The following list of balances is from the ledger of Mr. Carty as at February 28, 2018. Carriage Outwards $4,562 Drawings $18,440 Carriage Inwards $11,830 Discount Allowed $2,306 Discount Received $1,750 Purchases $135,680 Return Inwards $5,624 Rents, rates & insurance $25,973 Heating & Lighting $11,010 Postage, stationery & telephone $2,410 Debtor $ 24,500 Fixtures & Fittings- at cost $120,740 Provision for depreciation on fixtures & fittings- as at Feb. 28, 2018 $63,020 Depreciation $12,074 Advertising $5,980 Salaries & wages $38,521 Bad debt $2,008 Cash $534 Return Outwards $13,407 Provision for doubtful debt $512 Bank $4,440 Capital $83,887 Sales $259,870 Creditor $19,840 Stock as at March 1, 2017 $15,654 You are required to: Prepare a trial balance from the information provided Using the following additional information: Stock at the close of business was valued at $17,750 Insurances have been prepaid by $1,120 Heating and lighting is accrued by $1,360 The provision for doubtful debt is to be adjusted so that it is 3% of debtors Prepaid rates $5,435 Please answer this :Prepare the statement of financial position as at Feb. 28, 2018 So 1 questions total.
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.
The following list of balances is from the ledger of Mr. Carty as at February 28, 2018.
Carriage Outwards $4,562
Drawings $18,440
Carriage Inwards $11,830
Discount Allowed $2,306
Discount Received $1,750
Purchases $135,680
Return Inwards $5,624
Rents, rates & insurance $25,973
Heating & Lighting $11,010
Postage, stationery & telephone $2,410
Debtor $ 24,500
Fixtures & Fittings- at cost $120,740
Provision for
Depreciation $12,074
Advertising $5,980
Salaries & wages $38,521
Cash $534
Return Outwards $13,407
Provision for doubtful debt $512
Bank $4,440
Capital $83,887
Sales $259,870
Creditor $19,840
Stock as at March 1, 2017 $15,654
You are required to:
- Prepare a
trial balance from the information provided - Using the following additional information:
- Stock at the close of business was valued at $17,750
- Insurances have been prepaid by $1,120
- Heating and lighting is accrued by $1,360
- The provision for doubtful debt is to be adjusted so that it is 3% of debtors
- Prepaid rates $5,435
Please answer this :Prepare the statement of financial position as at Feb. 28, 2018
So 1 questions total.
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