Presented in alphabetical order, the following data are from the accounting records of Monty Corporation, a public company, at April 30, 2021: Accounts payable $64,000 Accounts receivable 47,000 Accumulated depreciation—equipment 69,000 Accumulated other comprehensive income 12,000 Bonds payable, due 2025 150,000 Cash 100,480 Common shares (no par value, unlimited authorized, 200,000 issued) 300,000 Depreciation expense 21,000 Dividend revenue 10,000 Equipment 210,000 Income tax expense 81,060 Income tax payable 25,000 Interest expense 7,400 Interest receivable 1,680 Interest revenue 3,360 Investment in associate 140,000 Investment Income or (Loss) 3,000 Investments at amortized cost, bonds due 2023 24,000 Investments at FVTOCI—equity 280,000 Investments at FVTPL—bonds 60,000 Investments at FVTPL—equity 15,000 OCI—holding gain or (loss), net of $3,600 tax (11,000) Rent expense 72,000 Retained earnings 114,260 Salaries expense 230,000 Service revenue 550,000 Prepare a statement of comprehensive income for April 30, 2021. Prepare a balance sheet at April 30, 2021
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.
Presented in alphabetical order, the following data are from the accounting records of Monty Corporation, a public company, at April 30, 2021:
| Accounts payable | $64,000 | |
| 47,000 | ||
| 69,000 | ||
| Accumulated other comprehensive income | 12,000 | |
| Bonds payable, due 2025 | 150,000 | |
| Cash | 100,480 | |
| Common shares (no par value, unlimited authorized, 200,000 issued) | 300,000 | |
| Depreciation expense | 21,000 | |
| Dividend revenue | 10,000 | |
| Equipment | 210,000 | |
| Income tax expense | 81,060 | |
| Income tax payable | 25,000 | |
| Interest expense | 7,400 | |
| Interest receivable | 1,680 | |
| Interest revenue | 3,360 | |
| Investment in associate | 140,000 | |
| Investment Income or (Loss) | 3,000 | |
| Investments at amortized cost, bonds due 2023 | 24,000 | |
| Investments at FVTOCI—equity | 280,000 | |
| Investments at FVTPL—bonds | 60,000 | |
| Investments at FVTPL—equity | 15,000 | |
| OCI—holding gain or (loss), net of $3,600 tax | (11,000) | |
| Rent expense | 72,000 | |
| 114,260 | ||
| Salaries expense | 230,000 | |
| Service revenue |
550,000
|
Prepare a statement of comprehensive income for April 30, 2021.
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