The accounts of Attempts Corporation are listed along with their adjusted balances before closing for the year ended June 30, 2023 Prepaid Expenses Inventory Note payable, long-term Salary payable Supplies Expense Depreciation Expense Sales revenue Insurance Expense Land Rent Expense Office Supplies Unearned sales revenue Sales Returns & Allowances 6,000 125,000 100,000 37,500 2,500 7,500 500,000 12,000 75,000 84,000 6,000 40,000 50,000 Accounts payable Accounts receivable Accumulated depreciation Common Stock Retained Earnings, July 1, 2022 Cash Cost of goods sold Miscellaneous Expense Advertising Expense Equipment Salaries Expense Notes payable, short-term Sales Discounts All month-end adjustments have already been made. Assume all accounts have normal balances. No dividends were declared or paid during the fiscal year. Requirements: 1. Prepare a multi-step income statement 2. Prepared the statement of retained earnings 3. Prepared a classified balance sheet 16,700 33,000 44,500 200,000 40,000 76,200 250,000 500 6,000 135,000 150,000 45,000 5,000
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.
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