Part B: CHECK FIGURES: 8. Total Dr.= $184,950; 9. Profit= $27,920; Total assets = $161,120 Required 6. Prepare journal entries to record each of the following November transactions. 7. Post the November entries. 8. Prepare a trial balance at November 30, 2020. 9. Prepare an income statement and a statement of changes in equity for the two months ended November 30, 2020, as well as a balance sheet at November 30, 2020. Nov. 1 2 5 8 13 18 22 24 25 28 30 30 Reimbursed Graham's business automobile expense for 1,000 kilometres at $1.00 per kilometre. Received $9.300 cash from Elite Corporation for computer services rendered. Purchased $1,920 of computer supplies for cash from Abbott Office Products. Billed Fostek Co. $8,700 for computer services rendered. Notified by Alamo Engineering Co. that Echo's bid of $7,500 Received $3,750 from Decker Company against the bill dated October 28. Donated $1,500 to the United Way in the company's name. for an upcoming project was accepted. Completed work for Alamo Engineering Co. and sent a bill for $7,500. Sent another bill to Decker Company for the past due amount of $2,700. Reimbursed Graham's business automobile expense for 1.200 kilometres at $1.00 per kilometre. Paid Carly Smith for 14 days' work. Withdrew $3,600 cash from the business for personal use.
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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