ACCOUNT NAME Cash Accounts Receivable Allowance for Doubtful Accounts Receivable from Highest Bidder Inventories Store Supplies Office Supplies Store Furniture and Fixtures Accumulated Depreciation - Store Furniture and Fixtures Office Equipment Accumulated Depreciation - Office Equipment Accounts Payable Salaries Payable Unearned Sales Cash Dividends Payable-Preference Cash Dividends Payable - Ordinary 12% Preference Share Capital Subscribed Share Capital-Preference Subscriptions Receivable-Preference Ordinary Share Capital Subscribed Share Capital - Ordinary Subscriptions Receivable-Ordinary Share Premium - Preference Share Premium-Ordinary Share Premium - Treasury Shares Accumulated Profits-Free Accumulated Profits-Appropriated for Treasury Shares Treasury Shares-Ordinary Sales Purchases Store Salaries Expense Store Supplies Expense Depreciation Expense-Store Furniture and Fixtures Miscellaneous Distribution Costs Office Salaries Expense Utilities Expense Rent Expense Office Supplies Expense Depreciation Expense-Office Equipment Doubtful Accounts Expense Miscellaneous Administrative Expenses Income Summary Totals TRIAL BALANCE DR 1,164,000 480,000 280.000 36,000 42,000 550,000 450,000 60.000 200.000 336,000 3,110,000 560.000 22,000 660.000 540,000 360.000 38.000 P CR 582,000 128,000 240,000 120,000 1,200,000 400,000 100,000 120,000 5,998.000 8.888.000 · 8,888.000 P ADJUSTMENTS DR 318,000 32,000 40,000 30,000 24,000 68,000 29,400 45,000 38,400 20,000 664,800 P CR 38,400 20,000 24,000 29,400 88,000 45,000 30,000 40.000 48,000 18.000 252,000 32.000 ADJUSTED TRIAL BALANCE DR 1,482,000 480,000 260,000 12,000 12,600 550,000 450.000 60,000 152.000 84.000 3,110,000 590.000 24,000 88,000 22,000 660,000 540.000 360,000 29.400 45,000 38,400 38,000 20,000 CR P 38,400 88,000 45.000 582,000 30,000 96,000 240.000 120.000 1,240,000 360,000 100,000 120,000 18,000 6,030,000 STATEMENT OF PROFIT & LOSS DR CR 6,030,000 465.200 6,030,000 STATEMENT OF FINANCIAL POSITION DR CR 1,482,000 480,000 260.000 12,000 12,600 550,000 450,000 60.000 152.000 84,000 P 38,400 88,000 45.000 582,000 30,000 96.000 240,000 120,000 1,240,000 360,000 3,110,000 590,000 24,000 88.000 22.000 660,000 540,000 360.000 29,400 45.000 38,400 38.000 20.000 664,800 9,107,400 P 9,107,400 5,564.800P 6,030,000 3,542.600 3,077.400 100,000 120.000 18.000 465.200 P 6,030,000 P 3,542.600 P 3,542.600
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.
Prepare the company’s Statement of Changes in Shareholders’ Equity for the year ended
December 31, 2021.
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