On April 1 Jiro Nozomi created a travel agency, Adventure Travel. The following transactions occured during the company's first month. April 1 Nozomi invested $30,000 cash and computer equipment worth $20000 in the company in exchange for common stock. april 2 the company rented furnished office space by paying $1800 cash for the first month's rent april 3 The company purchased $1,000 of office supplies for cash april 10 the compant paid $2400 cash for the premium on a 12 month insurance policy coverage begins on april 11. april 14 the company paid $1600 cash for 2 weeks salaries earned by employess. april 24 the company collected $8000 cash for commissions earned april 28 the company paid $1600 cash for 2 weeks salaries earned april 29 the company paid $350 cash for minor repairs to the company's computer april 30 the company paid $750 cash for this months telephone bill april 30 the company paid $1500 cash in dividends use the following information: A. prepaid insurance of $133 has expired this month B. at the end of the month $600 of office supplies are still available C. This month's depreciation on the computer equipment is $500 D. employees earned $420 of unpaid and unrecorded salaries as of month- end E. the company earned $1750 of commissions that are not yet billed at month-end Question: Make a Journal entry work sheet. Record the entry to close the revenue accounts, expense accounts, income summary and dividends acocunt.
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.
On April 1 Jiro Nozomi created a travel agency, Adventure Travel. The following transactions occured during the company's first month.
April 1 Nozomi invested $30,000 cash and computer equipment worth $20000 in the company in exchange for common stock.
april 2 the company rented furnished office space by paying $1800 cash for the first month's rent
april 3 The company purchased $1,000 of office supplies for cash
april 10 the compant paid $2400 cash for the premium on a 12 month insurance policy coverage begins on april 11.
april 14 the company paid $1600 cash for 2 weeks salaries earned by employess.
april 24 the company collected $8000 cash for commissions earned
april 28 the company paid $1600 cash for 2 weeks salaries earned
april 29 the company paid $350 cash for minor repairs to the company's computer
april 30 the company paid $750 cash for this months telephone bill
april 30 the company paid $1500 cash in dividends
use the following information:
A. prepaid insurance of $133 has expired this month
B. at the end of the month $600 of office supplies are still available
C. This month's
D. employees earned $420 of unpaid and unrecorded salaries as of month- end
E. the company earned $1750 of commissions that are not yet billed at month-end
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