Campbell Containers reported its balance sheet at May 31, 2019. Assume the following alphabetically listed accounts were included in its trial balance immediately prior to preparing the financial statements. Campbell Containers Adjusted Trial Balance At May 31, 2019 (millions of dollars) Debit Credit Accounts Payable $ 3,200 Accounts Receivable $ 5,300 Accumulated Depreciation 19,900 Cash 5,200 Common Stock 3,000 Depreciation Expense 2,700 Dividends 200 Equipment 38,700 Goodwill 4,100 Income Tax Expense 1,050 Income Tax Payable 1,050 Interest Expense 130 Interest Receivable 40 Interest Revenue 50 Notes Payable (long-term) 8,000 Notes Payable (short-term) 450 Office Expenses 7,570 Prepaid Rent 1,000 Rent Expense 2,800 Repairs and Maintenance Expense 2,200 Retained Earnings 16,920 Salaries and Wages Expense 16,900 Salaries and Wages Payable 2,000 Service Revenue 46,000 Supplies 480 Transportation Expense 12,200 $ 100,570 $ 100,570 E4-2 (Algo) Part 1 Required: 1. Based on the trial balance, provide the name of the account that would accompany (a) Prepaid Rent and (b) Depreciation Expense in deferral adjustments at May 31. (Check all that apply.)
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.
Campbell Containers reported its
| Campbell Containers | ||
| Adjusted Trial Balance | ||
| At May 31, 2019 | ||
| (millions of dollars) | ||
| Debit | Credit | |
|---|---|---|
| Accounts Payable | $ 3,200 | |
| $ 5,300 | ||
| 19,900 | ||
| Cash | 5,200 | |
| Common Stock | 3,000 | |
| Depreciation Expense | 2,700 | |
| Dividends | 200 | |
| Equipment | 38,700 | |
| 4,100 | ||
| Income Tax Expense | 1,050 | |
| Income Tax Payable | 1,050 | |
| Interest Expense | 130 | |
| Interest Receivable | 40 | |
| Interest Revenue | 50 | |
| Notes Payable (long-term) | 8,000 | |
| Notes Payable (short-term) | 450 | |
| Office Expenses | 7,570 | |
| Prepaid Rent | 1,000 | |
| Rent Expense | 2,800 | |
| Repairs and Maintenance Expense | 2,200 | |
| 16,920 | ||
| Salaries and Wages Expense | 16,900 | |
| Salaries and Wages Payable | 2,000 | |
| Service Revenue | 46,000 | |
| Supplies | 480 | |
| Transportation Expense | 12,200 | |
| $ 100,570 | $ 100,570 |
E4-2 (Algo) Part 1
Required:
1. Based on the trial balance, provide the name of the account that would accompany (a) Prepaid Rent and (b) Depreciation Expense in deferral adjustments at May 31. (Check all that apply.)
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