Recessive Interiors Unadjusted Trial Balance January 31, 2019 Account Debit Balances Credit Balances No. Cash.. 11 13,100 Supplies 13 8,000 Prepaid Insurance. 14 7,500 Equipment.. 16 113,000 Accumulated Depreciation-Equipment.. 17 12,000 Trucks.. 18 90,000 Accumulated Depreciation-Trucks Accounts Payable.. 19 27,100 21 4,500 Jeanne McQuay, Capital Jeanne McQuay, Drawing. 31 126,400 32 3,000 Service Revenue. 41 155,000 Wages Expense. 51 72,000 7,600 Rent Expense. Truck Expense. Miscellaneous Expense. 52 53 5,350 59 5,450 325,000 325,000
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.
The unadjusted
The data needed to determine year-end adjustments are as follows:
a. Supplies on hand at January 31 are $2,850.
b. Insurance premiums expired during the year are $3,150.
c.
d. Depreciation of trucks during the year is $4,000.
e. Wages accrued but not paid at January 31 are $900.
Instructions
1. For each account listed in the unadjusted trial balance, enter the balance in the
appropriate Balance column of a four-column account and place a check mark (✓) in
the Posting Reference column.
2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and
complete the spreadsheet. Add the accounts listed in part (3) as needed.
3. Journalize and post the
Record the adjusting entries on Page 26 of the journal. The following additional accounts from Recessive Interiors’ chart of accounts should be used: Wages Payable, 22;
Depreciation Expense—Equipment, 54; Supplies Expense, 55; Depreciation Expense—
Trucks, 56; Insurance Expense, 57.
4. Prepare an adjusted trial balance.
5. Prepare an income statement, a statement of owner’s equity (no additional investments
were made during the year), and a
6. Journalize and
journal. Indicate closed accounts by inserting a line in both Balance columns opposite
the closing entry.
7. Prepare a post-closing trial balance
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