Cash Land Notes Payable Depreciation Expense Accounts Receivable Accumulated Depreciation Common Stock Salaries Expense Supplies Accounts Payable Retained Earnings Supplies Expense Prepaid Insurance Deferred Revenue Dividends Rent Expense Equipment Salaries Payable Service Revenue Insurance Expense 1-Dec Issue common stock in exchange for cash of $7,500. 1-Dec Paid the premium in advance on a one-year insurance policy, $1,080. 1-Dec Purchased Equipment for $4,200 cash. 5-Dec Purchased office supplies from XYZ Company on account, $450. 15-Dec Provided services to customers for $8,000 cash. 16-Dec Provided services to customer ABC Inc. on account, $6,400. 17-Dec Received $2,100 cash in advance from a customer for services to be provided in January. 22-Dec Paid $230 to XYZ company for the Dec 5 purchase on account. 23-Dec Received $2,800 cash from customer, ABC Inc., on account. 25-Dec Paid the rent for the current month, $1,150. 28-Dec Paid salaries to employees for work performed from December 1 through December 28, $4,480. 29-Dec Declared and paid dividends to stockholders $300. 30-Dec Purchased land by signing 3 year note payable for $9,000. Record the December adjusting entries on the “General Journal” tab. 31-Dec One month’s insurance has expired $90. 31-Dec The remaining inventory of unused office supplies is $90. 31-Dec The estimated depreciation on equipment is $70. 31-Dec Salaries incurred from December 29 to December 31 but not yet paid or recorded total $480. Check point 1: Adjusted trial balance total debit/credit = $ 33,770 Check Point 2: Total Assets $ 26,770 Prepare a post closing trial balance and a classified balance sheet using the above information. List the net income.
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.
Cash Land Notes Payable Depreciation Expense
Supplies Accounts Payable
Prepaid Insurance Deferred Revenue Dividends Rent Expense
Equipment Salaries Payable Service Revenue Insurance Expense
1-Dec Issue common stock in exchange for cash of $7,500.
1-Dec Paid the premium in advance on a one-year insurance policy, $1,080.
1-Dec Purchased Equipment for $4,200 cash.
5-Dec Purchased office supplies from XYZ Company on account, $450.
15-Dec Provided services to customers for $8,000 cash.
16-Dec Provided services to customer ABC Inc. on account, $6,400.
17-Dec Received $2,100 cash in advance from a customer for services to be provided in January.
22-Dec Paid $230 to XYZ company for the Dec 5 purchase on account.
23-Dec Received $2,800 cash from customer, ABC Inc., on account.
25-Dec Paid the rent for the current month, $1,150.
28-Dec Paid salaries to employees for work performed from December 1 through December 28, $4,480.
29-Dec Declared and paid dividends to stockholders $300.
30-Dec Purchased land by signing 3 year note payable for $9,000.
Record the December
31-Dec One month’s insurance has expired $90.
31-Dec The remaining inventory of unused office supplies is $90.
31-Dec The estimated depreciation on equipment is $70.
31-Dec Salaries incurred from December 29 to December 31 but not yet paid or recorded total $480.
Check point 1: Adjusted
$ 33,770
Check Point 2: Total Assets $ 26,770
Prepare a post closing trial balance and a classified
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