The balance in the Allowance for uncollectible account as at Jan 1st, 2010 was $10,500 (credit) The balance in the Accounts Receivable account as at Jan 1st, 2010 was $133,000. The company completed the following transactions during 2010 and 2011: 2010 June 10th Wrote off the balance of $600 from Manny Miller's account as uncollectible Re-instated the account of Betty Lou and recorded the collection of $1200 as payment September 15h in full for her account which had been written off earlier December 31st Recorded the uncollectible account expense based on the aging schedule. The schedule showed that $14,100 of accounts receivable was estimated as uncollectible December 31st Made the closing entry for the uncollectible expense account 2011 Sold inventory to Jack Frost, $1100, on Jan 17 account Wrote off as uncollectible the accounts of August 15 Barry Semper, $1,500; Maria Jesus $1,400 and Rory Paul $200 Received 40% of the amount owed by Jack Sep tember 26 Frost and wrote off the remainder as uncollectible Received 20% of the funds owed from Maria October 16 Jesus as part payment of her account which had been written off earlier as uncollectible The Aging schedule showed an estimated December 31 $7500 as uncollectible
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.
Prepare the Allowance for Uncollectible and the
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