ive: Balance sheet, The following is an alphabetical listing of Stone Boat Company's balance sheet accounts and account balances on December 31, 2019: Accounts Payable $19,700 $44,200 37,100 Accounts Receivable 85,300 109,300 30,000 20,000 91,000 3,200 6,800 1,600 17,000 32,000 12,500 13,800 296,700 84,600 80,000 Accumulated Depreciation Additional Paid-in Capital on Common Stock Additional Paid-in Capital on Preferred Stock Allowance for Doubtful Accounts Bond Sinking Fund Cash Common Stock Income Taxes Payable Inventory Investment in Affiliate Long-Term Liabilities (book value) Miscellaneous Current Payables Notes Receivable Preferred Stock Property, Plant, and Equipment Retained Earnings Additional information: 1. The company reports on the balance sheet the net book value of property and equipment and long-term liabilities (known as control accounts). The related details are disclosed in the notes. 2. The straight-line method is used to depreciate property and equipment based upon cost, estimated residual value, and estimated life. The costs of the assets in this account are: land, $29,500; buildings, $164,600; store fixtures, $72,600; and office equipment, $30,000. 3. The accumulated depreciation breakdown is as follows: buildings, $54,600; store fixtures, $37,400; and office equipment, $17,300. 4. The long-term debt includes 12%, $36,000 face value bonds that mature on December 31, 2024, and have an unamortized bond discount of $1,000; 11%, $48,000 face value bonds that mature on December 31, 2025, have a premium on bonds payable of $1,800, and whose retirement is being funded by a bond sinking fund; and a 13% note payable that has a face value of $6,200 and matures on January 1, 2022. 5. The non-interest-bearing note receivable matures on June 1, 2023. 6. Inventory is listed at lower of cost or market; cost is determined on the basis of average cost. 7. The investment in affiliate is carried at cost. The company has guaranteed the interest on 12%, $50,000, 15-year bonds issued by this affiliate, Jay Company. 8. Common stock has a $10 par value per share, 10,000 shares are authorized, and 1,000 shares were issued during 2019 at a price of $13 per share, resulting in 8,000 shares issued at year-end. 9. Preferred stock has a $50 par value per share, 2,000 shares are authorized, and 140 shares were issued during 2019 at a price of $55 per share, resulting in 640 shares issued at year-end. 0. On January 15, 2020, before the December 31, 2019, balance sheet was issued, a building with a cost of $20,000 and a book value of $7,000 was totally destroyed. Insurance proceeds will amount to only $5,000. 1. Net income and dividends declared and paid during the year were $50,500 and $21,000, respectively. Required: 1. Prepare Stone Boat's December 31, 2019, balance sheet.
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.
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