Masay Company provided the following information for 2019: 7,500,000 Sales Inventories January 1: Raw materials Goods in process Finished goods Inventories December 31: Raw materials Goods in process Finished goods Purchases Direct labor Indirect labor Superintendence Light, heat and power Rent factory building Repair and maintenance - machinery Factory supplies used Sales salaries Advertising Depreciation - store equipment Office salaries Depreciation - office equipment Depreciation - machinery Sales returns and allowances Interest income Gain on sale of equipment Delivery expenses Accounting and legal fees Office expenses Earthquake loss Gain from expropriation of asset Income tax expense 200,000 240,000 360,000 280.000 170,000 300,000 3,000,000 950,000 250,000 210,000 320,000 120,000 50,000 110,000 400,000 160,000 70,000 150,000 40,000 60,000 50,000 10,000 100,000 200.000 150,000 250,000 300,000 100,000 320,000
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.
Based on the partial
Make sure that the Statement of Income has the following:
Net Purchases- X,XXX,XXX.
Total Gross Income- X,XXX,XXX.
Total Marketing and Selling Expenses- XXX,XXX.
Total General and Administrative Expenses- XXX,XXX.
Total Manufaturing Cost - X,XXX,XXX.
Total Cost of Goods Sold- X,XXX,XXX.
Total Cost of Goods Manufactured- X,XXX,XXX.
Total Factory
Net Income After Tax- XXX,XXX.
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