Assignment 1: Male CLO 2 The following transactions relate to Al-Zafra Police General Fund for the year ended December 31, 2020: (All figures are in 000 AED) The balance sheet as at 31/12/2019 was as follows: Assets: Liabilities & Fund Balances: Cash 200000 Асcounts раyable 80000 Fines receivable 150000 Wages payable 10000 Supplies 20000 Fund Balance: Reserved 280000 Total Assets 370000 Total Liabilities & FВ. 370000 1. The budget was passed. Estimated revenues amounted to 1,200,000 and appropriations totaled 1,300,000, and estimated other uses $300,000. 2. Contracts were issued for contracted services in the amount of 50,000. 3. Collected 1,150,000 cash including last year fines receivables and issued a bill of 100,000 for new license revenues. 4. Collected 500,000 for fines revenues. 5. Issued a contract of 300,000 to complete security and residency services in the West zone. 6. Contracted services of 250,000 were performed and supplies of 400,000 have been purchased on account to support the target service. 7. Paid 300,000 of the due payables. 8. Received 400,000 cash from the special revenue fund. 9. Issued a new order of 300,000, received all the ordered materials in the following month and paid it in cash. 10. Paid 950,000 cash for salaries and wages including the previous wages payable. 11. Current wages expenditure of 5,000 were incurred but unpaid. 12. Supplies of 275,000 had been consumed during the year. Required:
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.
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