Missing Amounts from Financial Statements The financial statements at the end of Dillworth Realty's first month of operations are shown below. DILLWORTH REALTYIncome StatementFor the Month Ended November 30, 2013 Fees earned $149,300 Operating expenses: Wages expense $ (a) Rent expense 14,400 Supplies expense 12000 Utilities expense 8,100 Miscellaneous expense 4,950 Total operating expenses (69,300) Net income $ (b) DILLWORTH REALTYStatement of Stockholders' EquityFor the Month Ended November 30, 2013 Common Stock Retained Earnings Total Balances, Nov. 1, 2013 $0 $0 $0 Issuance of common stock 270,000 270,000 Net income (c) (c) Dividends (d) (d) Balances, Nov. 30, 2013 $270,000 $(e) $314,000 DILLWORTH REALTYBalance Sheet November 30, 2013 Assets Cash $ 99,200 Supplies 6,000 Land (f) Total assets $ (g) Liabilities Note payable $ 7,200 Stockholders' Equity Common stock $ (h) Retained earnings (i) Total stockholders' equity (j) Total liabilities and stockholders' equity (k) DILLWORTH REALTYStatement of Cash Flows For the Month Ended November 30, 2013 Cash flows from operating activities: Cash received from customers $ (l) Deduct cash payments for expenses and payments to creditors (68,100) Net cash flows from operating activities $ (m) Cash flows used for investing activities: Cash payments for acquisition of land (216,000) Cash flows from financing activities: Cash received from issuing common stock $ 270,000 Deduct dividends (36,000) Net cash flows from financing activities (n) Net increase in cash during month (o) Cash as of November 1 0 Cash as of November 30 (o) Instructions: Would you classify a realty business such as Dillworth Realty as a manufacturing, merchandising, or service business? By analyzing the interrelationships among the financial statements, determine the proper amounts for (a) through (o). Enter all amounts as positive numbers. a. Wages expense $ b. Net income $ c. Net income for November $ d. Dividends $ e. Retained earnings, November 30, 20Y3 $ f. Land $ g. Total assets $ h. Common stock $ i. Retained earnings $ j. Total stockholders' equity $ k. Total liabilities and stockholders' equity $ l. Cash received from customers $ m. Net cash flows from operating activities $ n. Net cash flows from financing activities $ o. Net cash flow and November 30, 20Y3 cash balance $
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Missing Amounts from Financial Statements
The financial statements at the end of Dillworth Realty's first month of operations are shown below.
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DILLWORTH REALTY |
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Fees earned |
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$149,300 |
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Operating expenses: |
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Wages expense |
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$ (a) |
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Rent expense |
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14,400 |
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Supplies expense |
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12000 |
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Utilities expense |
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8,100 |
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Miscellaneous expense |
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4,950 |
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Total operating expenses |
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(69,300) |
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Net income |
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$ (b) |
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DILLWORTH REALTY |
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Common Stock |
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Total |
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Balances, Nov. 1, 2013 |
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$0 |
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$0 |
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$0 |
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Issuance of common stock |
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270,000 |
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270,000 |
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Net income |
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(c) |
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(c) |
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Dividends |
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(d) |
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(d) |
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Balances, Nov. 30, 2013 |
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$270,000 |
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$(e) |
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$314,000 |
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DILLWORTH REALTY |
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Assets |
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Cash |
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$ 99,200 |
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Supplies |
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6,000 |
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Land |
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(f) |
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Total assets |
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$ (g) |
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Liabilities |
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Note payable |
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$ 7,200 |
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Stockholders' Equity |
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Common stock |
$ (h) |
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Retained earnings |
(i) |
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Total stockholders' equity |
(j) |
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Total liabilities and stockholders' equity |
(k) |
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DILLWORTH REALTY |
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Cash flows from operating activities: |
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Cash received from customers |
$ (l) |
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Deduct cash payments for expenses and payments to creditors |
(68,100) |
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Net cash flows from operating activities |
$ (m) |
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Cash flows used for investing activities: |
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Cash payments for acquisition of land |
(216,000) |
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Cash flows from financing activities: |
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Cash received from issuing common stock |
$ 270,000 |
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Deduct dividends |
(36,000) |
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Net cash flows from financing activities |
(n) |
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Net increase in cash during month |
(o) |
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Cash as of November 1 |
0 |
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Cash as of November 30 |
(o) |
Instructions:
- Would you classify a realty business such as Dillworth Realty as a manufacturing, merchandising, or service business?
- By analyzing the interrelationships among the financial statements, determine the proper amounts for (a) through (o). Enter all amounts as positive numbers.
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a. Wages expense |
$ |
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b. Net income |
$ |
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c. Net income for November |
$ |
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d. Dividends |
$ |
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e. Retained earnings, November 30, 20Y3 |
$ |
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f. Land |
$ |
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g. Total assets |
$ |
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h. Common stock |
$ |
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i. Retained earnings |
$ |
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j. Total stockholders' equity |
$ |
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k. Total liabilities and stockholders' equity |
$ |
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l. Cash received from customers |
$ |
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m. Net cash flows from operating activities |
$ |
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n. Net cash flows from financing activities |
$ |
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o. Net cash flow and November 30, 20Y3 cash balance |
$ |
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