The trial balance columns of the worksheet for Warren Roofing at March 31, 2017, are as follows. WARREN ROOFING Worksheet For the Month Ended March 31, 2017 Accounts Titles Trial Balance Dr Cr Cash 13800 Accounts Receivable 28,300 Prepaid Insurance 3,600 Land 67,000 Buildings 127,000 Equipment 59,000 Accounts Payable 12,500 Unearned rent revenue 6,000 Mortgage Payable 120,000 Owner’s Capital 144,000 Owner’s Drawings 22,000 Service revenue 90,700 Rent revenue 29,000 Salaries and wages expense 42,000 Advertisement expense 20,500 Utilities expense 19,000 Total 402,200 402,200 Other data: A physical count reveals only $480 of roofing supplies on hand. Depreciation for March is $450. Unearned rent revenue earned $2000 at March 31. Accrued salaries are $700. Prepaid insurance is a 1-year policy starting March 1, 2017 Invoices representing $1,700 of services performed during the month have not been recorded as of March 31. Instructions (a) Enter the trial balance on a worksheet and complete the worksheet.
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
WARREN ROOFING
Worksheet
For the Month Ended March 31, 2017
|
Accounts Titles |
Trial Balance |
|
|
Dr |
Cr |
|
|
Cash |
13800 |
|
|
|
28,300 |
|
|
Prepaid Insurance |
3,600 |
|
|
Land |
67,000 |
|
|
Buildings |
127,000 |
|
|
Equipment |
59,000 |
|
|
Accounts Payable |
|
12,500 |
|
Unearned rent revenue |
|
6,000 |
|
Mortgage Payable |
|
120,000 |
|
Owner’s Capital |
|
144,000 |
|
Owner’s Drawings |
22,000 |
|
|
Service revenue |
|
90,700 |
|
Rent revenue |
|
29,000 |
|
Salaries and wages expense |
42,000 |
|
|
Advertisement expense |
20,500 |
|
|
Utilities expense |
19,000 |
|
|
Total |
402,200 |
402,200 |
Other data:
- A physical count reveals only $480 of roofing supplies on hand.
Depreciation for March is $450.- Unearned rent revenue earned $2000 at March 31.
- Accrued salaries are $700.
- Prepaid insurance is a 1-year policy starting March 1, 2017
- Invoices representing $1,700 of services performed during the month have not been recorded as of March 31.
Instructions
(a) Enter the trial balance on a worksheet and complete the worksheet.
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