The trial balance for December 31, 20-- has been entered below on the partial work sheet for Camping Supply Center. Camping Supply Center Work Sheet (partial) For the year ended December 31, 20-- Trial Balance Adjustments Adjusted Trial Balance Account Title Debit Credit Debit Credit Debit Credit Cash 38,400 Accounts Receivable 10,200 Merchandise Inventory 30,720 Supplies 8,520 Prepaid Insurance 5,760 Store Equipment 25,560 Accumulated Depreciation—Store Equipment 8,520 Building 60,000 Accumulated Depreciation—Building 12,000 Land 54,000 Accounts Payable 6,720 Wages Payable Sales Tax Payable 5,040 Mortgage Payable 86,400 Unearned Rental Revenue 7,500 Willie Kaplin, Capital 109,800 Willie Kaplin, Drawing 28,560 Income Summary Sales 118,440 Sales Returns and Allowances 2,952 Earned Rental Revenue Purchases 37,920 Purchases Returns and Allowances 5,064 Wages Expense 45,120 Telephone Expense 2,112 Supplies Expense Insurance Expense Utilities Expense 9,660 Depreciation Expense—Store Equipment Depreciation Expense—Building 359,484 359,484 Required: 1. Complete the Adjustments columns using the following year-end adjustments information. a./b. Based on a physical count, it was determined that merchandise inventory costing $21,700 is on hand as of December 31, 20--. c. Supplies remaining at the end of the year, $6,300. d. Unexpired insurance on hand at the end of the year, $2,200. e. Depreciation expense on the store equipment, $2,500. f. Depreciation expense on the building, $2,700. g. Unearned Rental Revenue as of December 31, $3,200. h. Wages earned but not yet paid, $660. 2. Complete the Adjusted Trial Balance columns of the work sheet. If an amount box does not require an entry, leave it blank.
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
| Camping Supply Center Work Sheet (partial) For the year ended December 31, 20-- |
||||||
|---|---|---|---|---|---|---|
| Trial Balance | Adjustments | Adjusted Trial Balance | ||||
| Account Title | Debit | Credit | Debit | Credit | Debit | Credit |
| Cash | 38,400 | |||||
| Accounts Receivable | 10,200 | |||||
| Merchandise Inventory | 30,720 | |||||
| Supplies | 8,520 | |||||
| Prepaid Insurance | 5,760 | |||||
| Store Equipment | 25,560 | |||||
| Accumulated |
8,520 | |||||
| Building | 60,000 | |||||
| Accumulated Depreciation—Building | 12,000 | |||||
| Land | 54,000 | |||||
| Accounts Payable | 6,720 | |||||
| Wages Payable | ||||||
| Sales Tax Payable | 5,040 | |||||
| Mortgage Payable | 86,400 | |||||
| Unearned Rental Revenue | 7,500 | |||||
| Willie Kaplin, Capital | 109,800 | |||||
| Willie Kaplin, Drawing | 28,560 | |||||
| Income Summary | ||||||
| Sales | 118,440 | |||||
| Sales Returns and Allowances | 2,952 | |||||
| Earned Rental Revenue | ||||||
| Purchases | 37,920 | |||||
| Purchases Returns and Allowances | 5,064 | |||||
| Wages Expense | 45,120 | |||||
| Telephone Expense | 2,112 | |||||
| Supplies Expense | ||||||
| Insurance Expense | ||||||
| Utilities Expense | 9,660 | |||||
| Depreciation Expense—Store Equipment | ||||||
| Depreciation Expense—Building | ||||||
| 359,484 | 359,484 |
Required:
1. Complete the Adjustments columns using the following year-end adjustments information.
| a./b. | Based on a physical count, it was determined that merchandise inventory costing $21,700 is on hand as of December 31, 20--. | |
| c. | Supplies remaining at the end of the year, $6,300. | |
| d. | Unexpired insurance on hand at the end of the year, $2,200. | |
| e. | Depreciation expense on the store equipment, $2,500. | |
| f. | Depreciation expense on the building, $2,700. | |
| g. | Unearned Rental Revenue as of December 31, $3,200. | |
| h. | Wages earned but not yet paid, $660. |
2. Complete the Adjusted Trial Balance columns of the work sheet.
If an amount box does not require an entry, leave it blank.
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