1) Presented below is information related to Opra Company for 2019. Beginning retained earnings Sales discounts Interest expense Sales commission expenses Sales returns and allowances $ 120,400 55,500 12,700 44,400 85,000 5,800,000 51,000 1,175,100 85,500 Sales revenue Dividend revenue Cost of goods sold Loss on sale of plant assets Unrealized gain on held-to-maturity investments Loss on the disposition of retail division Salaries and wages expense 15,000 95,000 284,000 Unearned sales revenue 115,000 Freight-Out Telephone and Internet expense Utilities expense 45,000 19,000 40,000 Insurance expense Advertising expense 18,000 85,000 Loss due to Hailstorm 70,000 Depreciation expense 58,000 Write-off-of Goodwill 125,000 Dividends declared and paid on Common Stock Dividends declared and paid on Preferred Stock 50,000 40,000 During 2019, there were 200.000 shares of common stock outstanding all year. (Assume a tax rate of 30% on all items, unless indicated otherwise.) Instructions Prepare a multiple-step income statement. Opra Company decided to discontinue its entire retail operations and to retain its wholesale operations. On July, Opra sold the retail operations to Ramp Corp. Compute earnings per share as it should be shown on the face of the income statement.
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.
Presented below is information related to Opra Company for 2019.
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