The following information was taken from the records of GALATIANS Boutique Shop for the month of December: Sales P198,000 Purchases at cost P96,000 Sales returns 4,000 Purchases at retail 176,000 Additional Markups 20,000 Purchase return at cost 4,000 Markup cancellations 3,000 Purchase return at retail 6,000 Markdowns 18,600 Beg. inventory at cost 60,000 Markdown cancellations 5,600 Beg. inventory at retail 93,000 Freight-in 4,800 Purchase discount 16,000 Abnormal losses @ cost 15,000 Discount for employees 5,000 Abnormal losses @ retail 23,000 Normal losses 20,000 What is the cost of ending inventory under Weighted Average method (round off CTR to whole number, example: 32%)
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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The following information was taken from the records of GALATIANS Boutique Shop for the month of December:
|
Sales |
P198,000 |
|
Purchases at cost |
P96,000 |
|
Sales returns |
4,000 |
|
Purchases at retail |
176,000 |
|
Additional Markups |
20,000 |
|
Purchase return at cost |
4,000 |
|
Markup cancellations |
3,000 |
|
Purchase return at retail |
6,000 |
|
Markdowns |
18,600 |
|
Beg. inventory at cost |
60,000 |
|
Markdown cancellations |
5,600 |
|
Beg. inventory at retail |
93,000 |
|
Freight-in |
4,800 |
|
Purchase discount |
16,000 |
|
Abnormal losses @ cost |
15,000 |
|
Discount for employees |
5,000 |
|
Abnormal losses @ retail |
23,000 |
|
Normal losses |
20,000 |
What is the cost of ending inventory under Weighted Average method (round off CTR to whole number, example: 32%)
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