Question 2 Stacey's Landscaping Solutions provides services to landlords and property owners. The following data relates to the expected operations for the three months of October to December 2022. Credit Services provided Receipts from Debtors Cash services provided Payment to Suppliers Credit Purchases of supplies October 18 000 20 000 1950 4 HOO 3900 November 12000 30 000 2250 13 500 2 150 December 12 400 5000 3300 4 800 1890 Additional Information: Stacey plans to purchase new Equipment in October of $12,000 cash The old equipment is expected to be sold in November for $4,000 Salaries paid each month are $8.500 Administrative costs paid each month are $2,000 4 Depreciation on equipment in October is 5500 and will increase to 51,200 each month from November due to the new equipment purchase Stacey likes to keep a minimum cash balance of $12,000 each month The cash balance as at 30 September 2022 was $15 000 Required: Prepare a cash budget on a monthly basis for the three months ending December 2022 For the toober pre AT-F1G1PCS OF ALTENATO DA
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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