Epicenter Laundry Unadjusted Trial Balance June 30, 2018 Debit Credit Balances Balances Cash... 11,000 Laundry Supplies Prepaid Insurance. Laundry Equipment.. Accumulated Depreciation Accounts Payable. Common Stock .. Retained Earnings 21,500 9,600 232,600 125,400 11,800 40,000 65,600 Dividends 10,000 Laundry Revenue. Wages Expense.. Rent Expense.. Utilities Expense. Miscellaneous Expense. 232,200 125,200 40,000 19,700 5,400 475,000 475,000
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.
T accounts,
closing entries; optional end-of-period spreadsheet
The unadjusted
The data needed to determine year-end adjustments are as follows:
(A) Laundry supplies on hand at June 30 are $3,600.
(B) Insurance premiums expired during the year are $5,700.
(C)
(D) Wages accrued but not paid at June 30 are $1,100.
Instructions
1. For each account listed in the unadjusted trial balance, enter the balance in a T account.
Identify the balance as “June 30 Bal.” In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, Insurance Expense, and Income Summary.
2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete
the spreadsheet. Add the accounts listed in part (1) as needed.
3. Journalize and post the adjusting entries. Identify the adjustments by “Adj.” and the new
balances as “Adj. Bal.”
4. Prepare an adjusted trial balance.
5. Prepare an income statement, a
6. Journalize and
7. Prepare a post-closing trial balance.
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