Taylor Fishing Charters has collected the following data for the December 31 adjusting entries: View the data. Read the requirements. Requirement 1. Journalize the adjusting entries needed on December 31 for Taylor Fishing Charters. Assume Taylor Fishing Charters records adjusting entries only at the end of the year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) a. The company received its electric bill on December 20 for $350 but will not pay it until January 5. (Use the Utilities Payable account.) Accounts and Explanation Credit Date (a) Dec. 31 Utilities Expense b. Taylor Fishing Charters purchased a three-month boat insurance policy on November 1 for $2,100. Taylor Fishing Charters recorded a debit to Prepaid Insurance. Date Accounts and Explanation Debit Credit (b) Dec. 31 Date ▼ c. As of December 31, Taylor Fishing Charters had earned $1,500 of charter revenue that has not been recorded or received. Accounts and Explanation Debit Credit (c) Dec. 31 Debit Requirements - X 1. Journalize the adjusting entries needed on December 31 for Taylor Fishing Charters. Assume Taylor Fishing Charters records adjusting entries only at the end of the year. 2. If Taylor Fishing Charters had not recorded the adjusting entries, indicate which specific category of accounts on the financial statements would be misstated and if the misstatement is overstated or understated. Data a. The company received its electric bill on December 20 for $350 but will not pay it until January 5. (Use the Utilities Payable account.) b. Taylor Fishing Charters purchased a three-month boat insurance policy on November 1 for $2,100. Taylor Fishing Charters recorded a debit to Prepaid Insurance. c. As of December 31, Taylor Fishing Charters had earned $1,500 of charter revenue that has not been recorded or received. d. Taylor Fishing Charters' fishing boat was purchased on January 1 at a cost of $77,500. Taylor Fishing Charters expects to use the boat for five years and that it will have a residual value of $2,500. Determine annual depreciation assuming the straight-line depreciation method is used. e. On October 1, Taylor Fishing Charters received $8,500 prepayment for a deep-sea fishing charter to take place in December. As of December 31, Taylor Fishing Charters has completed the charter. Print - X Done
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.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
