Make an income statement. Adjusted Trial Balance Cash $19,635 Accounts Recievable $31,300 Merchandise inventory $14,850 Prepaid rent $1,050 office supplies $750 office equipment $35,000 Accumulated Depreciation $10,000 Accounts Payable $12,000 Sales Tax payable $2,950 Capital Stock $15,500 Retained Earnings $18,650 Sales Revenue $190,000 Sales Returns and Allowances $2,000 Cost of Goods Sold $76,815 Utilities Expense $4,700 Office Supplies Expense $950 Depreciation Expense $2,350 Rent Expense $5,000 Insurance Expense $750 Salaries Expense $47,000 Income Tax Expense $6,950 _________ ________ $249,100 $249,100
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.
Make an income statement.
Adjusted
Cash $19,635
Accounts Recievable $31,300
Merchandise inventory $14,850
Prepaid rent $1,050
office supplies $750
office equipment $35,000
Accounts Payable $12,000
Sales Tax payable $2,950
Capital Stock $15,500
Sales Revenue $190,000
Sales Returns and Allowances $2,000
Cost of Goods Sold $76,815
Utilities Expense $4,700
Office Supplies Expense $950
Depreciation Expense $2,350
Rent Expense $5,000
Insurance Expense $750
Salaries Expense $47,000
Income Tax Expense $6,950
_________ ________
$249,100 $249,100
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