The following account balances are provided for Holland Pty Ltd on 30 June 2020. Revenue and expense accounts cover the financial year ending on that date. A) Prepare the Income Statement for Holland Pty Ltd for the year ended 30 June 2020 by filling the table. B) Prepare a complete classified Balance Sheet using the narrative (report) format on 30 June 2020 by filling the table.
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.
The following account balances are provided for Holland Pty Ltd on 30 June 2020. Revenue and expense accounts cover the financial year ending on that date.
A) Prepare the Income Statement for Holland Pty Ltd for the year ended 30 June 2020 by filling the table.
B) Prepare a complete classified
![b) Prepare a complete classified Balance Sheet using the narrative (report) format at 30 June
2020.
Balance Sheet of Holland Pty Ltd
at 30 June 2020](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa7c2c5b7-509b-4b9e-ade5-81e5059484d9%2F4bb466eb-67cc-4a52-86ee-4c0db4328fe1%2Fqme1d9h_processed.png&w=3840&q=75)
![Question 1
The following account balances are provided for Holland Pty Ltd at 30 June 2020. Revenue and
expense accounts cover the financial year ending on that date.
Accounts payable
20,000 Loan payable-long term
110,000
Accounts receivable
48,600 Office Equipment
14,000
Accumulated depreciation-
office equipment
2,000 Office
expenses
15,200
Advertisement expense
7,800 Prepaid insurance
1,400
Retained earnings (beginning of
Cash at bank
50,000
15,800
year)
Cost of sales
64,000 Salaries expense
28,000
Depreciation expense
2,000 Sales revenue
120,000
Inventory
40,000 Share Capital
76,400
Land
75,000 Unearned service revenue
1,800
a) Prepare the Income Statement for Holland Pty Ltd for the year ended 30 June 2020.
Holland Pty Ltd
Income Statement for the year ended 30 June
Page 1 of 2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa7c2c5b7-509b-4b9e-ade5-81e5059484d9%2F4bb466eb-67cc-4a52-86ee-4c0db4328fe1%2Fzp2rwu_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
![Cornerstones of Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337690881/9781337690881_smallCoverImage.gif)
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
![Financial Accounting](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)