The following information has been taken from the Ledger of Numan Corporation for the year ended on June 30, 2015. Stock of material, June 30 2015 Rs. 15,700 Stock of materials, July 1, 2014 12,000 Material purchased during the year 46,250 Carriage outward 1,075 Carriage inward 1,786 Salaries – Factory 1,625 Salaries – Office 3,150 Discount Expenses 725 Bad debts written off 1,628 Repairs of plant, machineries and tools 1,113 Rent and insurance – Factory 2,125 Rent and insurance – Office 500 Sales 115,275 Travelling Expenses 525 Traveler’s salaries and commission 1,925 Productive wages 31,500 Depreciation of machinery and tools 1,625 Depreciation of office furniture 75 Director’s fees 1,500 Gas, and water – Factory 300 Gas and water – Office 100 Manager’s salary (3/4th factory, 1/4th office) 2,500 General Expenses 850 Calculate Factory Cost for the year ended June 30, 2015.
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 information has been taken from the Ledger of Numan Corporation for the year ended on June 30, 2015.
|
Stock of material, June 30 2015 |
Rs. 15,700 |
|
Stock of materials, July 1, 2014 |
12,000 |
|
Material purchased during the year |
46,250 |
|
Carriage outward |
1,075 |
|
Carriage inward |
1,786 |
|
Salaries – Factory |
1,625 |
|
Salaries – Office |
3,150 |
|
Discount Expenses |
725 |
|
|
1,628 |
|
Repairs of plant, machineries and tools |
1,113 |
|
Rent and insurance – Factory |
2,125 |
|
Rent and insurance – Office |
500 |
|
Sales |
115,275 |
|
Travelling Expenses |
525 |
|
Traveler’s salaries and commission |
1,925 |
|
Productive wages |
31,500 |
|
|
1,625 |
|
Depreciation of office furniture |
75 |
|
Director’s fees |
1,500 |
|
Gas, and water – Factory |
300 |
|
Gas and water – Office |
100 |
|
Manager’s salary (3/4th factory, 1/4th office) |
2,500 |
|
General Expenses |
850 |
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