The following balances were extracted from the books of MajuJaya Enterprise on 31 December 2022. Particu Capital 50,000 Motor vehicles 90,000 Fixtures & fittings 48,500 Inventory as at 1 January 2022 32,200 Provis doubtful debts 500 Accumulated depreciation as at 1 January 2022: Motor vehicles 16,000 Fixtures & fittings fixed deposit 30,000 4% bank loan 50,000 Sales 199,070 Purchases 73,500 Return inwards 2,050 Return out Discount allowed 2,550 Discount received 2,830 Account receivables 37,700 Account payables 48,650 Carriag ,570 Interest received 450 Commission received 2,600 Salaries 16,100 Electricity bills 5,400 Custom duty on p 000 Insurances 450 Maintenance expenses 3,300 Drawing 2,300 Cash in hand 6,800 Cash at bank 25,200 A information: 1. Inventory as of 31 December 2022, RM 18,180 2. Depreciation for the year ended 31 Decembe yet to be provided as follows: a. Fixtures & fittings. 10% using straight-line method b. Motor vehicles:15% usin balance method. 3. Electricity bills were paid in advance by RM500. Meanwhile, the RM400 commission has received yet. 4. One of the customers Anthony, was declared bankrupt and unable to pay the debt amount o The provision for doubtful debts is to be adjusted to 5% based on remaining account receivables. 6. RM140 s not been paid. 7. 'Purchases' include goods valued at RM1,040 that were withdrawn by owner, Azreen for he
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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