Prepare the statement of Financial Position for Kiddy Kraft Traders as at 31 March 2022, using the information provided in
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.
Prepare the
![The following balances were taken from the accounting records of Kiddy Krafts Traders for the year ended 31
March 2022
Kiddy Kraft (Pty) Ltd
Debit
Credit
Capital (1 April 2021)
525 000
Mortgage: ABSA Bank
415 500
Land and buildings at cost
715 500
Vehicles at cost
115 500
Equipment at cost
45 500
Accumulated depreciation vehicles (1 April 2021)
40 500
Accumulated depreciation Equipment (1 April 2021)
24 500
Fixed deposit Investment Bank
105 500
Inventory
65 500
Debtors control account
35 500
Allowance for credit losses
19 000
Bank (favourable)
108 200
Creditor's control
54 000
Accrued expenses
32 500
VAT payable
20 500
Cash float
17 000
Petty cash
18 000
Sales
1063 750
Discounts: sales
65 750
Cost of sales
700 900
Rental income
55 500
Interest on loan: SBSA
28 250
Telephone & internet
32 500
Water and electricity
35 000
Salaries and wages
85 150
Insurance
31 500
Advertising
45 500
Depreciation
2 250 750
2 250 750](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb8c491fe-873b-4c92-a492-70fd693654c7%2Fc0fc6d06-b568-4852-8495-9adecf3f9333%2Fztlk9xb_processed.png&w=3840&q=75)
![statement of Financial Position of Kiddy Kraft Traders as at
31 March 2022
R
ASSETS
Non-current assets
Current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Owners equity
Tabilities
Non-curront liabilitios
Current liabilities](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb8c491fe-873b-4c92-a492-70fd693654c7%2Fc0fc6d06-b568-4852-8495-9adecf3f9333%2Fe5o1c1s_processed.png&w=3840&q=75)
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