Here is financial information for Glitter Inc. December 31, 2020 December 31, 2019 Current assets $123,000 $100,000 Plant assets (net) 395,214 331,000 Current liabilities 88,134 74,000 Long-term liabilities 136,840 88,000 Common stock, $1 par 166,026 118,000 Retained earnings 127,214 151,000 Prepare a schedule showing a horizontal analysis for 2020, using 2019 as the base year. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45% or parentheses e.g. (45), (45%). Round percentages to 1 decimal place, e.g. 12.3%.)
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.
Here is financial information for Glitter Inc.
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December 31, 2020
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December 31, 2019
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|---|---|---|---|---|
| Current assets | $123,000 | $100,000 | ||
| Plant assets (net) | 395,214 | 331,000 | ||
| Current liabilities | 88,134 | 74,000 | ||
| Long-term liabilities | 136,840 | 88,000 | ||
| Common stock, $1 par | 166,026 | 118,000 | ||
| 127,214 | 151,000 |
Prepare a schedule showing a horizontal analysis for 2020, using 2019 as the base year. (Enter negative amounts and percentages using either a negative sign preceding the number e.g. -45, -45% or parentheses e.g. (45), (45%). Round percentages to 1 decimal place, e.g. 12.3%.)
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GLITTER INC.
Condensed Balance Sheets December 31 |
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Increase or (Decrease)
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2020
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2019
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Amount
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Percentage
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Assets
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Current assets
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$123,000
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$100,000
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$enter a dollar amount
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enter a percentage number rounded to 1 decimal place %
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Plant assets (net)
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395,214 | 331,000 | enter a dollar amount |
enter a percentage number rounded to 1 decimal place %
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Total assets
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$518,214 | $431,000 |
$enter a total amount for the first part of the balance sheet
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enter a percentage number rounded to 1 decimal place %
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Liabilities
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Current liabilities
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$88,134
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$74,000
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$enter a dollar amount
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enter a percentage number rounded to 1 decimal place %
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Long-term liabilities
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136,840 | 88,000 | enter a dollar amount |
enter a percentage number rounded to 1 decimal place %
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Total liabilities
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224,974 | 162,000 | enter a total amount for section one of the second part of the balance sheet |
enter a percentage number rounded to 1 decimal place %
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Common stock, $1 par
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166,026
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118,000
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enter a dollar amount
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enter a percentage number rounded to 1 decimal place %
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Retained earnings
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127,214 | 151,000 | enter a dollar amount |
enter a percentage number rounded to 1 decimal place %
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Total stockholders' equity
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293,240 | 269,000 | enter a total amount for section two of the second part of the balance sheet |
enter a percentage number rounded to 1 decimal place %
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Total liabilities and stockholders' equity
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$518,214 | $431,000 | $enter a total amount for the second part of the balance sheet |
enter a percentage number rounded to 1 decimal place %
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