1. Prepare journal entries for each transaction listed in the table above (use Section I template), based on Kelly Consulting's chart of accounts. Chart of Accounts for Kelly Consulting Cash Kelly Pitney, Capital Kelly Pitney, Drawing Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation Depreciation Expense Fees Earned Salary Expense Rent Expense Supplies Expense Insurance Expense Accounts Payable Salaries Payable Miscellaneous Expense Unearned Fees 2. Enter the balance in a T account (refer the post-closing Trial balance as at 30 April 2019). Post the journal entries to T accounts (use Section II template). One example has been given for your reference. 3. Prepare adjusting journal entries for transaction (a) to (f) [use Section III template]. Then, post the entries to the appropriate T accounts.
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.
![Instructions
1. Prepare journal entries for each transaction listed in the
table above (use Section I template), based on Kelly
Consulting's chart of accounts.
Chart of Accounts for Kelly Consulting
Cash
Kelly Pitney, Capital
Accounts Receivable
Kelly Pitney, Drawing
Supplies
Fees Earned
Prepaid Rent
Prepaid Insurance
Office Equipment
Accumulated Depreciation Depreciation Expense
Accounts Payable
Salaries Payable
Salary Expense
Rent Expense
Supplies Expense
Insurance Expense
Miscellaneous Expense
Unearned Fees
2. Enter the balance in a T account (refer the post-closing
Trial balance as at 30 April 2019). Post the journal entries
to T accounts (use Section II template). One example has
been given for your reference.
3. Prepare adjusting journal entries for transaction (a) to (f)
[use Section III template]. Then, post the entries to the
appropriate T accounts.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4c90c03c-ef74-4835-8c9e-14dda9f4cba3%2F849c44d7-65a0-4b0d-8ab0-f766bc0bbb66%2Fe8ap71m_processed.jpeg&w=3840&q=75)
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