John Bala Maps Unadjusted Trial Balance Dec. 31, 2019 Cash P 31,000 83,000 Accounts Receivable Merchandise Inventory Prepaid Insurance Office Supplies Office Equipment Accumulated Depreciation Accounts Payable 627,000 54,000 68,000 370,000 P 50,000 58,000 Bala, Capital Bala, Withdrawals Sales Sales Returns and Allowances 517,000 87,000 2,675,000 26,000 Sales Discounts 23,000 1,512,000 Purchases Purchases Returns and Allowances 14,000 19,000 Purchases Discounts Transportation In Salaries Expense 38,000 327,000 Advertising Expense Rent Expense 61,000 26,000 P 3,333,000 P 3,333,000 Totals Additional Information: a. Merchandise inventory as at Dec. 31, 2019 amounted to P532,000. b. Insurance coverage with premiums of P18,000 has expired during the year. c. Depreciation for the year amounted to P25,000. d. Office Supplies remaining at year-end amounted to P15,000. e. Salaries in the amount of P9,000 have accrued as at Dec. 31, 2019. Required: Prepare the worksheet.
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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