o accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2020 information related to Swifty Company ($000 omitted). Administrative expense Officers' salaries $4,968 Depreciation of office furniture and equipment 4,028 Cost of goods sold 60,638 Rent revenue 17,298 Selling expense Delivery expense 2,758 Sales commissions 8,048 Depreciation of sales equipment 6,548 Sales revenue 96,568 Income tax 9,138 Interest expense 1,928 Common shares outstanding for 2020 total 39,5
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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Administrative expense
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Officers' salaries
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$4,968 | |
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4,028 | |
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Cost of goods sold
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60,638 | |
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Rent revenue
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17,298 | |
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Selling expense
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Delivery expense
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2,758 | |
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Sales commissions
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8,048 | |
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Depreciation of sales equipment
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6,548 | |
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Sales revenue
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96,568 | |
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Income tax
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9,138 | |
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Interest expense
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1,928 |
Common shares outstanding for 2020 total 39,530 (000 omitted).
(a)
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SWIFTY COMPANY
Income Statement choose the accounting period (In thousands, except earnings per share) |
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enter an income statement item
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$enter a dollar amount
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enter an income statement item
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enter a dollar amount
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select a summarizing line for the first part
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enter a total amount for the first part
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select an opening name for section one
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select an opening name for subsection one
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enter an income statement item
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$enter a dollar amount
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enter an income statement item
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enter a dollar amount
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enter an income statement item
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enter a dollar amount
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select a closing name for subsection one
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$enter a total amount for subsection one
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select an opening name for subsection two
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enter an income statement item
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enter a dollar amount
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enter an income statement item
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enter a dollar amount
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select a closing name for subsection two
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enter a total amount for subsection two
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enter a total amount for section one
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select a summarizing line for the second part
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enter a total amount for the second part
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select an opening name for section two
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enter an income statement item
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enter a dollar amount
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enter a subtotal of the two previous amounts
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select an opening name for section three
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enter an income statement item
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enter a dollar amount
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select a summarizing line for the third part
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enter a total amount for all three parts
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enter an income statement item
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enter a dollar amount
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select a closing name for this statement
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$enter a total net income or loss amount
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select an income statement item
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