of the document PRACTICAL EXERCISE 1 From the porial worksheets of Mr. Quickie Repair Shop for the quarter ended June 30, 2020, prepore he dosing entries and the post-dosing trial balance. Mr. QUICKIE REPAIR SHOP Worksheet For the quorter ended June 30, 2020 Adusted Tris Balance Debit Income Balance Sneet Statement Debik Credit Credit Debit Credt 25,000 62,500 Cash on Hand 25,000 62,500 Accourts Receivable Estimated Uncollecticle Account Notes Receivacie Shop Equipment Accumulated Deoreciion - Shop Eouoment Furmiture and Fiture Accumulated Deprecistion - Funture and Fixture AcCounts Payable Notes Payable Rosas, Cacital Rosas, Drawings Repair Income Saaies Expense Rent Expense Supples Expense Taxes and Licenses Light and Woter Expense TOx Payable Salaries Payoble Interest Expense 3,125 3,125 17,500 75,000 17,500 75.000 12,500 12,500 20,000 20,000 14,500 14,500 27500 30,000 111,875 27,500 30,000 111.875 2,500 2,500 75,000 75,000 27,500 20,000 7,500 5,250 27,500 20,000 7.500 5,250 8,750 1,500 7,500 1,500 7,500 500 S00 Iterest Payable Light and Water Payable Supples on Hand Bad Debt Expense Depreciation Expense Interest Receivable Interest Income 500 1,250 500 1,250 2,500 2,500 1,250 9,500 300 1,250 9,500 300 300 300 75,300 205,300 210,250 4,950 205,550 285,550 80,250 Net Loss Total 4,960 80,250 60,250 210,250 210,250
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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