Directions: Establish the T-Accounts for the following accounts. Write your answers on a separate sheet of paper. Atienza, Capital Atienza, Withdrawals Cleaning Revenues Salaries Expense Rent Expense Advertising Expense Telephone Expense Miscellaneous Expense Cash Accounts Receivable Cleaning Supplies Prepaid Insurance Cleaning Equipment Service Vehicle Notes Payable Accounts Payable Lee Atienza recently established a business that will operate as Atienza Cleaning Service. The following are his transactions for February 2020: Feb. 1 He invested P62,000 cash in his business. He acquired cleaning supplies on account worth P21,400. He acquired cleaning equipment on account amounting to P15,600. 3 5 6. He bought a service vehicle worth P47,000; paid P10,000 and balance will be paid within 30 days; issued a note the payable. He paid P7,300 for the rent. He received P31,800 cash for cleaning services rendered. He paid P1,700 for a newspaper advertisement. He bought an insurance premium covering 6 months, recorded as prepaid insurance for P4,800. He paid P9,000 on account. He paid P2,200 for miscellaneous expenses. He billed customers with P18,600 for cleaning services rendered. He paid P8,400 for salaries. He collected P9,800 from the customers on account last February15. He paid the note payable worth P2,400. He paid P900 for the telephone bill. He paid P1,700 for the salaries of full-time and part-time employees. He billed P22,500 from customers for cleaning services rendered. 7 9. 10 12 13 14 15 16 20 22 25 28 28 28 He withdrew P10.000 from the business.
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.
Lea Atienza recently established a business that will operate as Atienza Cleaning Service
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
