GARCIA TRAVEL Statement of Retained Earnings For Month Ended April 30 Retained earnings, April 1 $0 Retained earnings, April 30 $15,894
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.
| Apr 02 | Cash | 38,000 | ||
| Computer equipment | 11,400 | |||
| Common stock | 49,400 | |||
| 2 | Apr 03 | Rent expense | 2,600 | |
| Cash | 2,600 | |||
| 3 | Apr 04 | Office supplies | 1,200 | |
| Cash | 1,200 | |||
| 4 | Apr 10 | Prepaid insurance | 1,800 | |
| Cash | 1,800 | |||
| 5 | Apr 14 | Salaries expense | 1,540 | |
| Cash | 1,540 | |||
| 6 | Apr 24 | Cash | 24,000 | |
| Commissions revenue | 24,000 | |||
| 7 | Apr 28 | Salaries expense | 1,540 | |
| Cash | 1,540 | |||
| 8 | Apr 29 | Repairs expense | 650 | |
| Cash | 650 | |||
| 9 | Apr 30 | Telephone expense | 400 | |
| Cash | 400 | |||
| 10 | Apr 30 | Dividends | 1,700 | |
| Cash | 1,700 | |||
| 11 | Apr 30 | Insurance expense | 100 | |
| Prepaid insurance | 100 | |||
| 12 | Apr 30 | Office supplies expense | 600 | |
| Office supplies | 600 | |||
| 13 | Apr 30 | 190 | ||
| 190 | ||||
| 14 | Apr 30 | Salaries expense | 616 | |
| Salaries payable | 616 | |||
| 15 | Apr 30 | 1,830 | ||
| Commissions revenue | 1,830 | |||
| 16 | Apr 30 | Commissions revenue | 25,830 | |
| Income summary | 25,830 | |||
| 17 | Apr 30 | Income summary | 8,236 | |
| Depreciation expense - Computer equipment | 190 | |||
| Salaries expense | 3,696 | |||
| Insurance expense | 100 | |||
| Office supplies expense | 600 | |||
| Repairs expense | 650 | |||
| Telephone expense | 400 | |||
| Rent expense | 2,600 | |||
| 18 | Apr 30 | Income summary | 17,594 | |
| 17,594 | ||||
| 19 | Apr 30 | Retained earnings | 1,700 | |
| Dividends | 1,700 |
| GARCIA TRAVEL | |
| Statement of Retained Earnings | |
| For Month Ended April 30 | |
| Retained earnings, April 1 | $0 |
| Retained earnings, April 30 | $15,894 |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
