One of our client companies, EA Community Laundry Chain, asked us for a consultation on their company's operations. Based on the accounting information provided by them, please use your professional knowledge to assist them in the preparation of five financial statement based on the information below (Income statement, financial position statement, retained earnings statement, comprehensive income statement, cash flow statement). Sales revenue: $555,080 Inventory: $102,000 Cost of goods sold: $210,000 Bonds payable: $78,000 Financing Costs: $10,000 Notes payable (due in 5 months): $24,400 Buildings: $80,400 Selling and administrative expenses: $75,000 Share capital: $60,000 Gain on sale of plant assets: $45,000 Accumulated depreciation-equipment: $10,000 Unrealized gain on non-trading securities: $15,000 Prepaid advertising: $5,000 Loss on discontinued operations: $20,000 Supplies: $1860 Dividends declared and paid: $50,400 Taxes payable: $3000 Allocation to non-controlling interest: $60,000 Cash: S???(Need to be confirmed in the Financial Position Statement) Equipment: $40,000 Salaries and wages payable: $900 Interest payable: $600 Accumulated depreciation-buildings: $15,000 Land: $157,320 k
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 question needs two
![One of our client companics, EA Community Laundry Chain, asked us for a consultation on
their company's operations. Based on the accounting information provided by them, please use
your professional knowledge to assist them in the preparation of five financial statement based
on the information below (Income statement, financial position statement, retained earnings
statement, comprehensive income statement, cash flow statement).
Sales revenue: $555,080
Inventory: $102,000
Cost of goods sold: $210,000
Bonds payable: $78,000
Financing Costs: $10,000
Notes payable (due in 5 months): $24,400
Selling and administrative expenses:
$75,000
Buildings: $80,400
Share capital: $60,000
Gain on sale of plant assets: $45,000
Accumulated depreciation-equipment:
$10,000
Unrealized gain on non-trading securities:
$15,000
Prepaid advertising: $5,000
Loss on discontinued operations: $20,000
Supplies: $1860
Dividends declared and paid: $50,400
Taxes payable: $3000
Allocation to non-controlling interest:
$60,000
Cash: S???(Need to be confirmed in the
Financial Position Statement)
Equipment: $40,000
Salaries and wages payable: $900
Interest payable: $600
Accumulated depreciation-buildings:
$15,000
Land: $157,320
Please prepare five financial statements based on the data provided by Pizza Mr. Park, Inc](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbe37c360-7bb6-4add-9a78-7ca00bc0fbb0%2Fa0135087-feb6-486f-b124-db15249c9cef%2Fnglr4wu_processed.jpeg&w=3840&q=75)
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