Partially Completed Spreadsheet The following partially completed spreadsheet has been prepared for Perrin Company's 2019 statement of cash flows: Balances Change Worksheet Entries Account Titles 12/31/18 12/31/19 Increase (Decrease) Debit Credit Debits Cash 800 1,540 Noncash Accounts: Accounts Receivable 1,500 2,180 Inventory 3,100 6,055 Investments in Stock — 2,800
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.
Partially Completed Spreadsheet
The following partially completed spreadsheet has been prepared for Perrin Company's 2019 statement of
| Balances | Change | Worksheet Entries | |||
| Account Titles | 12/31/18 | 12/31/19 | Increase (Decrease) | Debit | Credit |
| Debits | |||||
| Cash | 800 | 1,540 | |||
| Noncash Accounts: | |||||
| 1,500 | 2,180 | ||||
| Inventory | 3,100 | 6,055 | |||
| Investments in Stock | — | 2,800 | |||
| Land | 6,000 | 9,200 | |||
| Buildings | 20,000 | 20,000 | |||
| Office Equipment | 4,000 | 6,100 | |||
| Delivery Equipment | 3,000 | 5,900 | |||
| — | 2,000 | ||||
| Totals | 38,400 | 55,775 | ? | ||
| Credits | |||||
| 7,000 | 8,500 | ||||
| Accounts Payable | 3,300 | 3,695 | |||
| Wages Payable | 600 | 500 | |||
| Bonds Payable | — | 5,000 | |||
| Premium on Bonds Payable | — | 240 | |||
| Common Stock, $10 par | 6,000 | 8,200 | |||
| Additional Paid-in Capital | 9,000 | 13,640 | |||
| ? | ? | 3,500 | |||
| Totals | 38,400 | 55,775 | ? |
- Additional relevant information:
Beginning retained earnings $12,500 Plus: Net income 8,000 $20,500 Less: Stock dividends $ 840 Cash dividends 3,660 (4,500) Ending retained earnings $16,000 - Accumulated depreciation is a contra account for all the depreciable assets. Depreciation on these assets totaled $2,200 for the year.
- On January 1, 2019, the company issued 10% bonds with a face value of $5,000 at 106. Interest was paid semiannually on June 30 and December 31. The bonds mature on January 1, 2024. Straight-line amortization is used for bond discount or premium. Bond interest expense was $440.
- Land was purchased for $3,200 during the year.
- Two hundred shares of common stock were issued for delivery equipment valued at $2,900 and office equipment valued at $3,100.
- Twenty shares of stock were issued as a stock dividend. The market price per share was $42.
- Office equipment with a cost of $1,000 and a book value of $300 was sold for $50.
- Fifty shares of its own common stock were reacquired by the company as treasury stock. The company purchased the shares for $40 per share.
- One hundred shares of Doe Company stock were purchased for $28 per share at year-end.
Required:
Complete the spreadsheet. Use the minus sign to indicate
I specifically need help with calculating the correct credit and debit for Premium on Bonds Payable, the correct bond premium amortization, the proceeds from issuance of bonds, and the Issuance of common stock for equipment.
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