On Onaber 1, 20YE, Jay Crowley estubiahed Afordabie Reahy which conpleed the folowing trarsactions during the month 1. Journalize entries for transactions Oct. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles. Jay Crowley transferred cash from a personal bank accoune to an account to be used for the business in exchange for common stock, $31,500. * Paid rent on office and equipment for the month, $2,450. PAGE 1 JOURNAL * Purchased supplies on account, $2,200. ACCOUNTING EQUATION 4 Paid creditor on account, $860. CREDIT DATE DESCRIPTION POST. REF. DEBIT ASSETS LIABILITIES EQUITY * Earned sales commissions, receiving cash, $16,430. * Paid automobile expenses (including rental charge) for month, $1,650, and miscellaneous expenses, $690. 1 Paid office salaries, $2,200. * Determined that the cost of supplies used was $1,100. * Paid dividends, $3,600. 1. umatize entries for transactions Oct. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles. 2 Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. 10 Accounts containing only a single entry do not need a balance. 3 Prepare an unadusted tral batance as of October 31, 20Y6. 12 4 Determine the following a. Amount of total revenue recorded in the ledger. D. Amount of total expenses recorded in the iledger. 13 14 s Amount of net income for October 15 5 Determine the increase or decrease in retained amings for October. CHART OF ACCOUNTSAffordable RealtyGeneral Ledger ASSETS 11 Cash 12 Supples 2. Post the joumal entries to the Taccurt, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances, after all postng is compiete. Accounts containing anly a single entry do not need a balance LIABIITIES 21 Accounts Payatle EQUITY Cash 31 Common Sook 33 Divitends REVENUE 41 Sales Commissions 3. Prepare an unaduated brial balance as of October 31, 20Y6. EXPENSES Bal. Attordabie Reality UNADJUSTED TRIAL BALANCE 51 Rent Expense 52 Ofice Salaries Expense Supplies 53 Automobile Expense October 31, 20Y6 54 Suppies Expene ACEOUNT TILE CREDIT 55 Miscellaneous Epense Cash Bal. 2 Supplies Accounts Payable Accounts Payable 4 Commn Sick s Dividends Ba a Sales Cammissions Common Stock Ront Eapense CHtice Salaries Expense Dividends Autemabile Expense 1a Supplies Expense 1 Miscellancous Expense Sales Commissions 2Totals Rent Expense 4. Determine the following: Office Salaries Expense a Amount of total revenue recorded in the ledger. b. Amount of total experses recorded in the ledger . Automobile Expense C. Amaunt af nat income for October. Supplies Expense 5. Determine the increase or decrease in retavned eamings for October. Miscelianeous Expense
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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