Bamboo Consulting is a consulting firm owned and operated by Lisa Gooch. The following end-of-period spreadsheet was prepared for the year ended July 31, 20Y5: Bamboo Consulting End-of-Period Spreadsheet For the Year Ended July 31, 20Y5 Unadjusted Trial Balance Adjustments Adjusted Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 58,500 58,500 Accounts Receivable 106,000 106,000 Supplies 12,500 (a) 6,500 6,000 Office Equipment 507,000 507,000 Accumulated Depreciation 25,500 (b) 5,500 31,000 Accounts Payable 20,000 20,000 Salaries Payable (c) 2,800 2,800 Lisa Gooch, Capital 509,000 509,000 Lisa Gooch, Drawing 27,000 27,000 Fees Earned 353,800 353,800 Salary Expense 186,500 (c) 2,800 189,300 Supplies Expense (a) 6,500 6,500 Depreciation Expense (b) 5,500 5,500 Miscellaneous Expense 10,800 10,800 908,300 908,300 14,800 14,800 916,600 916,600 Based on the preceding spreadsheet, prepare an income statement, statement of owner’s equity, and balance sheet for Bamboo Consulting. Be sure to read the instructions for each financial statement carefully. Labels Current assets Current liabilities Expenses For the Year Ended July 31, 20Y5 July 31, 20Y5 Property, plant, and equipment Revenues Amount Descriptions Decrease in owner’s equity Increase in owner’s equity Lisa Gooch, capital Lisa Gooch, capital, August 1, 20Y4 Lisa Gooch, capital, July 31, 20Y5 Net income Net loss Total assets Total current assets Total expenses
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.
| Bamboo Consulting | ||||||
| End-of-Period Spreadsheet | ||||||
| For the Year Ended July 31, 20Y5 | ||||||
| Unadjusted |
Adjustments | Adjusted Trial Balance | ||||
| Account Title | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. |
| Cash | 58,500 | 58,500 | ||||
| 106,000 | 106,000 | |||||
| Supplies | 12,500 | (a) 6,500 | 6,000 | |||
| Office Equipment | 507,000 | 507,000 | ||||
| 25,500 | (b) 5,500 | 31,000 | ||||
| Accounts Payable | 20,000 | 20,000 | ||||
| Salaries Payable | (c) 2,800 | 2,800 | ||||
| Lisa Gooch, Capital | 509,000 | 509,000 | ||||
| Lisa Gooch, Drawing | 27,000 | 27,000 | ||||
| Fees Earned | 353,800 | 353,800 | ||||
| Salary Expense | 186,500 | (c) 2,800 | 189,300 | |||
| Supplies Expense | (a) 6,500 | 6,500 | ||||
| Depreciation Expense | (b) 5,500 | 5,500 | ||||
| Miscellaneous Expense | 10,800 | 10,800 | ||||
| 908,300 | 908,300 | 14,800 | 14,800 | 916,600 | 916,600 |
| Based on the preceding spreadsheet, prepare an income statement, statement of owner’s equity, and |
| Labels | |
| Current assets | |
| Current liabilities | |
| Expenses | |
| For the Year Ended July 31, 20Y5 | |
| July 31, 20Y5 | |
| Property, plant, and equipment | |
| Revenues | |
| Amount Descriptions | |
| Decrease in owner’s equity | |
| Increase in owner’s equity | |
| Lisa Gooch, capital | |
| Lisa Gooch, capital, August 1, 20Y4 | |
| Lisa Gooch, capital, July 31, 20Y5 | |
| Net income | |
| Net loss | |
| Total assets | |
| Total current assets | |
| Total expenses | |
| Total liabilities | |
| Total liabilities and owner’s equity | |
| Total property, plant, and equipment | |
| Total revenues | |
| Withdrawals |
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