2021 APRIL 1 The business, JHARA DISTRIBUTORS, was registered as a single proprietorship, Jonathan Andes invested P39,000. 2 Bought computer equipment for P10,000 cash. 2 Bought merchandise on account from JIBT Supply Co. P15,900, terms 2/10, n/30. 3 Bought office supplies on cash basis for P700. 4 Sold merchandise on account P15,200, FOB Destination, terms 2/10, n/30. 5 Paid P200 freight on April 4 sale. 6 Received credit from JIBT Supply Co. for merchandise 300 11 Paid JIBT 13 Collected from April 4 customers. 14 Bought merchandise on cash basis for P14,400. 15 Salaries paid P1,500. 16 Borrowed money from PNB Bank, signed a promissory note for P12,000. 17 Received refund from a supplier on cash purchase of April 14; P500. 18 Bought merchandise from CASIO, P14,200, FOB Shipping point, terms 2/10, n/30. 20 Paid freight on April 18 purchase, 700 23 Sold merchandise for P16,400. 26 Bought merchandise for cash P12,300 27 Paid CASIO on the April 18 purchase, P9,000. No discount allowed on partial payment. 28 J. Andes got cash from the business, P2,008. 29 Made refund to cash customer for defective merchandise, P900 30 Sold merchandise on account, P13,700, n/30. 30 Paid the following: Advertising, P1,000; Utilities, P400; Rent, P3,500; Salaries. P1,500. 30 Inventory April 30, P25,000.
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.
Create a Ledger.
Transaction for the JHARA DISTRIBUTORS for April 2021 follows:
![2021
APRIL
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The business, JHARA DISTRIBUTORS, was registered as a single
proprietorship, Jonathan Andes invested P39,000.
Bought computer equipment for P10,000 cash.
Bought merchandise on account from JIBT Supply Co.
P15,900, terms 2/10, n/30.
Bought office supplies on cash basis for P700.
Sold merchandise on account P15,200, FOB Destination, terms 2/10, n/30.
Paid P200 freight on April 4 sale.
Received credit from JIBT Supply Co. for merchandise 300
Paid JIBT
Collected from April 4 customers.
Bought merchandise on cash basis for P14,400.
Salaries paid P1,500.
Borrowed money from PNB Bank, signed a promissory note for P12,000.
Received refund from a supplier on cash purchase of April 14; P500.
Bought merchandise from CASIO, P14,200, FOB Shipping point, terms 2/10,
n/30.
Paid freight on April 18 purchase, 700
Sold merchandise for P16,400.
Bought merchandise for cash P12,300
Paid CASIO on the April 18 purchase, P9,000. No discount allowed on partial
payment.
J. Andes got cash from the business, P2,008.
Made refund to cash customer for defective merchandise, P900
Sold merchandise on account, P13,700, n/30.
Paid the following: Advertising, P1,000; Utilities, P400; Rent, P3,500;
Salaries. P1,500.
Inventory April 30, P25,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa9a4c91c-4b68-4380-afc5-de76e5d46d15%2F5193368f-1e9c-4eea-9281-3a7119277cec%2F9fbn8cu_processed.png&w=3840&q=75)
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CHART OF ACCOUNT (For Journalizing and Posting)
ASSET
400
INCOME
CASH
401
SALES
ACCOUNTS RECEIVABLE
405
SALES RETURNS & ALLOWANCE
MERCHANDISE INVENTORY
410
SALES DISCOUNTS
SUPPLIES
500
EXPENSES
EQUIPMENT
501
PURCHASES
LIABILITIES
502
PURCHASES RETURNS AND ALLOWANCES
ACCOUNTS PAYABLE
503
PURCHASE DISCOUNT
NOTES PAYABLE
504
FREIGHT IN
EQUITY
505
ADVERTISING
ANDES, CAPITAL
506
FREIGHT OUT
ANDES, DRAWINGS
510
RENT EXPENSE
530
SALARIES
540
UTILITIES
601
INCOME SUMMARY
CHART OF ACCOUNT (For Financial Statement Preparation)
Asset
400
INCOME
Cash
401
}
Net Sales
Receivables
405
Inventories
410
Prepaid Expenses
500
EXPENSES
Property Plant & Equipment
501
}
LIABILITIES
502
Accounts Payable
503
Notes Payable
504
EQUITY
505
ADVERTISING
Andes, Capital
506
FREIGHT OUT
Andes, Drawings
510
RENT EXPENSE
COST OF GOOD SOLD](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa9a4c91c-4b68-4380-afc5-de76e5d46d15%2F5193368f-1e9c-4eea-9281-3a7119277cec%2Fi6lkw6_processed.png&w=3840&q=75)
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