Revised Journal Entries JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Jan. 17 9,600.00 9,600.00 ALllowance for Doubtful Accounts 10 Sales 3,500.00 11 Mar. 4 ALllowance for Doubtful Accounts 2,200.00 12 Sales 2,200.00 13 4 Cash 2,200.00 ↑ 14 ALlowance for Doubtful Accounts 2,200.00 15 13 Cash 5,540.00 ↑ 16 5.540.00 17 18 31 ALllowance for Doubtful Accounts 19 Cash Fan-Tastic Sports Gear Inc. DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Jan. 17 Sales 9,600.00 Bad Debt Expense 9,600.00 17 Bad Debt Expense 9,600.00 Accounts Receivable-U'S Sports Corp. 9,600.00 21 Cash 10,700.00 Bad Debt Expense 2,200.00 Accounts Receivable-Four Seasons Sportswear Co. 12,900.00 Feb. 15 Accounts Receivable-Healthy Running Inc. 3,000.00 Bad Debt Expense 500.00 10 Sales 3,500.00 11 Mar. 4 Accounts Receivable-Four Seasons Sportswear Co. 2,200.00 12 Bad Debt Expense 2,200.00 13 4 Cash 2,200.00 14 Bad Debt Expense 2,200.00 15 13 Cash 5,540.00 16 Accounts Receivable-Barb's Best Gear 5,540.00 17 31 Bad Debt Expense 20,970.00 Accounts Receivable-Healthy Running Inc. 5,150.00 18 19 Accounts Receivable-The Locker Room 4,100.00 Accounts Receivable-d's Sports Corp. 2,780.00 20 21 Accounts Receivable-Get Your Gear Inc. 7,050.00 22 Accounts Receivable-Ready-2-Go 1,890.00
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.
You have just been hired as the accountant for Fan-Tastic Sports Gear Inc., a wholesaler of sporting goods and apparel. The previous accountant left abruptly in late December, 20Y7, and an accounting intern has been drafting the
2. Finalize the journal entries shown on the Fan-Tastic Sports Gear Inc. panel and make any necessary changes. Use the allowance method for picture 2. ( the entries that are on the revised journal picture are correct)
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