5. Inventory is valued using weighted average and a periodic inventory system is maintained. Estelle has already applied weighted average to food inventory after doing a physical count on December 31, 2020 before closing for New Year's Eve. Estelle records inventory at net realizable value on an item-by-item basis for financial reporting. Food inventory Cost Net realizable value Raw ingredients – wet Raw ingredients – dry Finished goods - refrigerated and non-refrigerated desserts ready for sale $45,000 $72,000 $3,200 $43,000 $68,000 $3,200 Total 120,200 114,200 6. The following information regarding payroll needs to be considered in preparing year-end financial statements (ignore payroll taxes): Employee Estelle Bisset Pay rate Annual 108,000 Pay frequency 15th of the month (for prior month) 7. In November 2020 TBTI was approached about catering a 35th birthday. TBTI would prepare individual boxes of French desserts for the host to pick up and deliver to attendees' homes in advance of the Zoom 35th birthday party on May 5, 2021. A formal agreement was signed on November 31, 2020 with a $1,000 deposit paid. The full amount paid was credited to Revenue on November 31, 2020. 8. Estelle has reviewed the Accounts Receivable balance and notes that about 70% relates to corporate receivables from catering events. Normally TBTI collects virtually all of its outstanding receivables. Due to the unusual economic conditions in 2020, Estelle fears this year might be different. Estelle estimates fifteen percent of the non-corporate receivables might not be collectible. Forty percent of the corporate receivables have been outstanding 90 days and ten percent of the corporate receivables have been outstanding for over 120 days. Estelle believes fifteen percent of the over 120 day corporate receivables might not be collectible and ten percent of over 90 day corporate receivables might not be collectible.
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.
|
Account name |
Debit CAD$ |
Credit CAD$ |
|
Cash |
423,177 |
|
|
|
137,000 |
|
|
Prepaid insurance |
5,400 |
|
|
Inventory |
149,000 |
|
|
Machinery |
53,000 |
|
|
|
|
25,864 |
|
Furniture and Fixtures |
123,000 |
|
|
Accumulated depreciation – Furniture and Fixtures |
|
30,750 |
|
Computer equipment |
4,650 |
|
|
Accounts payable |
|
45,000 |
|
Dividends payable |
|
10,000 |
|
Contributed capital |
|
75,000 |
|
|
|
140,386 |
|
Revenue |
|
2,630,000 |
|
Purchases |
606,800 |
|
|
Salaries and wages expense |
1,281,913 |
|
|
Advertising expense |
16,000 |
|
|
Repairs and maintenance |
18,370 |
|
|
Rent expense |
96,000 |
|
|
Laundry expense |
18,250 |
|
|
Utilities expense |
14,440 |
|
|
Administrative expense |
10,000 |
|
|
|
$2,957,000 |
$2,957,000 |
question # 8 from the photos, how would I calculate it and what would the
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