a) Prepare the entries in a journal and then post to the T accounts. b) Total the T accounts and prepare a unadjusted trial balance. c) make the two adjusting entries: 1) Accrue wages that will be paid the beginning of next month of $2,500. 2) Counted the inventory of guitars on hand and valued at $15,000. The difference should be assumed matched to the sales. That should be recorded as COGS. d) prepare adjusted trial balance based on prior two adjustments.
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.
As per our protocol we provide solution to the first three sub-parts only but you have asked multiple sub-parts under a single question kindly resubmit remaining questions along with specifying the sub-part number.
Unadjusted trial balance is the trail balance in which there has not been any adjusted entry made by the company means like the cost of goods sold entry is not recorded in it so the cost of goods sold are included in the total inventory.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
