Required information [The following information applies to the questions displayed below.] The trial balance for Terry's Auto Shop as of January 1, Year 2, follows: Account Titles Cash Inventory Common Stock Retained Earnings. Total The following events affected the company during the Year 2 accounting period: 1. Purchased merchandise on account that cost $4,160. 2. The goods in Event 1 were purchased FOB shipping point with freight cost of $250 cash. 3. Returned $495 of damaged merchandise for credit on account. 4. Agreed to keep other damaged merchandise for which the company received an $205 allowance. 5. Sold merchandise that cost $2,720 for $13,400 cash. Income Statement 6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $105 cash. 7. Paid $2,950 on the merchandise purchased in Event 1. 8. Paid $8,850 cash for operating expenses. Balance Sheet Statement of Cash Flows Debit $ 14,870 3,090 c. Prepare a multistep income statement, balance sheet, and statement of cash flows. (Assume that closing entries have been made.) $ 17,960 Complete this question by entering your answers in the tabs below. TERRY'S AUTO SHOP Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow from operating activities: Cash inflow from customers Cash outflow for inventory Cash outflow for expenses Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Plus: Beginning cash balance Ending cash balance ✓ ✓ ✓ Prepare statement of cash flows. (Assume that closing entries have been made.) (Cash outflows should be indicated with a minus sign.) ♥ Credit $ 7,320 10,640 $ 17,960 X Answer is not complete. $ $ 0 0 0 0 0
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
2
![Required information
[The following information applies to the questions displayed below.]
The trial balance for Terry's Auto Shop as of January 1, Year 2, follows:
Account Titles
Cash
Inventory
Common Stock
Retained Earnings
Total
The following events affected the company during the Year 2 accounting period:
1. Purchased merchandise on account that cost $4,160.
2. The goods in Event 1 were purchased FOB shipping point with freight cost of $250 cash.
3. Returned $495 of damaged merchandise for credit on account.
4. Agreed to keep other damaged merchandise for which the company received an $205 allowance.
5. Sold merchandise that cost $2,720 for $13,400 cash.
Income
Statement
6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $105 cash.
7. Paid $2,950 on the merchandise purchased in Event 1.
8. Paid $8,850 cash for operating expenses.
Balance Sheet
c. Prepare a multistep income statement, balance sheet, and statement of cash flows. (Assume that closing entries have been made.)
Statement of
Cash Flows
Complete this question by entering your answers in the tabs below.
Debit
$ 14,870
3,090
TERRY'S AUTO SHOP
Statement of Cash Flows
For the Year Ended December 31, Year 2
Cash flow from operating activities:
Cash inflow from customers
Cash outflow for inventory
Cash outflow for expenses
$ 17,960
Net cash flow from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net change in cash
Plus: Beginning cash balance
Ending cash balance
Prepare a statement of cash flows. (Assume that closing entries have been made.) (Cash outflows should be indicated with a
minus sign.)
✓
✓
✓
Credit
$ 7,320
10,640
$ 17,960
> Answer is not complete.
< Balance Sheet
$
$
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0
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0
Statement of Cash Flows](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbbbe2d55-00a4-408d-a96e-5df7f99c9d72%2F0b86dc89-033f-4722-80db-4455b3fabbe0%2Fmzun6eg_processed.png&w=3840&q=75)
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