Name of Account Cash Accounts Receivable Allowance for Bad Debt Merchandise Inventory Store Supplies Prepaid Insurance Prepaid Rent Furniture and Fixtures Accumulated Depreciation - Furniture & Fixtures Motor Truck Gregg's Shipping Supplies Ltd Barbados Branch Adjusted Trial Balance June 30 2022 Accumulated Dereciation - Motor Truck Accounts Payable Salary Payable Interest Payable Uneraned Sales Revenue Long Term Loan Gregg's Capital Gregg's Withdrawals Sales Revenue Sales Discount Sales Returns and Allowances Cost of Goods Sold Salaries Expenses Insurance Expense Utilities Expense Rent Expense Depreciation Expense - Furniture & Fixtures Depreciation Expense - Motor Truck Store Supplies Expense Gain on Disposal of old - Motor Truck Bad - Debt Expense Interest Expense Dr (S) 8,517,000 950,000 700,000 1,100,000 80,000 82,500 106,500 800,000 1,200,000 105,000 150,000 105,000 1,088,000 713,000 198,000 405,000 426,000 79,000 80,000 100,000 25,000 24,000 Cr (S) 70,000 158,000 80,000 45,000 108,000 57,000 370,000 900,000 1,700,000 4,987,500 41,500 8,517,000
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.
The business is expected to make principal payments totalling $300,000 towards the loan during the fiscal year to June 30 ,2023
Question 1
Using the images and information above prepare the company’s statement of owner’s equity at June 30, 2022 and the company’s classified
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