Furniture costing $63,800 is sold at its book value in 2021. Acquisitions of furniture total $49,200 cash, on which no depreciation is necessary because it is acquired at year-end. Complete the general ledger accounts to calculate cash received from the sale of furniture. Furniture Beginning balance Ending balance Accumulated Depreciation Beginning balance Ending balance Cost Accumulated depreciation Book value (Cash recelved)
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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Income before taxes
Income taxes expense
30,200
13,900
$ 24,300
Net income
Furniture costing $63,800 is sold at its book value in 2021. Acquisitions of furniture total $49,200 cash, on which no depreciation is
necessary because it is acquired at year-end. Complete the general ledger accounts to calculate cash received from the sale of
furniture.
Furniture
Beginning balance
Ending balance
Accumulated Depreciation
Beginning balance
Ending balance
Cost
Accumulated depreciation
Book value (Cash recelved)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4f300de-61c2-41b4-a064-bc006d7b726b%2F63d005bb-a341-4821-a2d9-ba3085d9061e%2Ffx0npo_processed.jpeg&w=3840&q=75)
![CRUZ, INCORPORATED
Comparative Balance Sheets
2021
At December 31
Assets
2020
Cash
Accounts receivable, net
Inventory
Prepaid expenses
Total current assets
$ 75,900
32,600
68, 300
4,200
181,000
$ 18,900
40,100
75,300
3,500
137,800
Furniture
Accumulated depreciation-Purniture
৪4, 600
(13,100)
$ 252,500
99, 200
(7,500)
$ 229,500
Total asseta
Liabilities and Equity
Accounts payable
Wages payable
Incone taxes payable
Total current liabilities
Notes payable (long-term)
Total liabilities
Equity
Comnon stock, $5 par value
Retained earnings
$ 11,900
7,100
1,200
20,200
24,800
45,000
$ 16,900
4,000
2,200
23,100
58,400
81,500
177,300
30,200
$ 252,500
141,500
6,500
$ 229,500
Total liabilities and equity
CRUZ, INCORPORATED
Incone Statement
For Year Ended Decenber 31, 2021
Sales
$ 392,900
252,900
140,000
Cost of goods sold
Gross profit
Operating expenses (excluding depreciation)
Depreciation expense
Incone before taxes
Incone taxes expense
71,600
30, 200
36, 200
13,900
$ 24,300
Net income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4f300de-61c2-41b4-a064-bc006d7b726b%2F63d005bb-a341-4821-a2d9-ba3085d9061e%2Fwfd0jf_processed.jpeg&w=3840&q=75)
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