ASSIGNMENT 1: STATEMENT OF FINANCIAL POSITION INTERMEDIATE ACCOUNTING I (ACC310) SEMESTER 1, 2021-2022 Presented below are a number of statement of financial position items for Asia Pacific Corporation, for the current year ended on July 31, 2021. Accounts Amount Accounts Amount Goodwill €125,000 Inventory €239,800 Payroll taxes payahle 177.591 Rent payable (short-term) 45,000 Bonds payable 285,000 Income tanes payable 98,362 Cash 360,000 Long-term restal obligations 480,000 Land 480,000 Share capital-ondinary, El par value 200,000 Notes receivable 445,700 Notes payable (te banks) 265,000 Share capital preference, E10 150,000 Accounts payable par value Prepaid expenses 490,000 87.920 Retained camingp Equipement 1,470.000 ncome tases receivable 97,630 Trading securities 121,000 Uesecured notes payable (leng-term) 1600,000 Accumulated depreciation 270.200 Accumulated depreciation- buildings Buildings 292.000 equipment 1,640,000 Additional information: 1) Share capital-ordinary shares authorized was 400,000 shares and share capital preference shares authorized was 20,000 shares. 2) Assume that notes receivable and notes payable are short- term, unless stated otherwise. 3) Cost and fair value of trading securities are the same. REQUIRED: Prepare a classified statement of financial position in good form for Asia Pacific Corporation as at July 31, 2021.
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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