The following is a partial list of the account balances, after adjustments, for Wilson Company on December 31, 20x1: Depreciation expense - buildings and office equipment Sales commissions and salaries Inventory, January 1, 20x1 Sales supplies used Retained earnings, January 1, 20x1 Purchase returns and allowances Bad debts expense Freight in Sales discounts taken Purchases Delivery expense Office supplies expense Ordinary share capital, P20 par value Loss on sale of office equipment (pretax) Insurance and property tax expense Sales P29,000 36,400 75,600 11,200 367,400 12,400 5,400 27,000 9,800 346,000 15,400 2,800 160,000 10,000 17,000 681,400 13,800 64,000 34,000 24,200 8,200 19,200 7,400 Rent revenue Office and administrative salaries expense Promotion and advertising expense Sales returns and allowances Purchase discounts taken Depreciation expense - sales equipment Interest expense The following information is also available: 1. The company declared and paid a P0.60 share cash dividend on its ordinary shares. The shares were outstanding the entire year. 2. A physical count determined that December 31, 2015 ending inventory was P68,200. 3. A flood destroyed a warehouse, resulting in a pretax loss of P24,000. The last flood in this area hac oCcurred 20 vears earlier
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.
question
2. Prepare the statement of comprehensive income for the year ended December 31, 20x1.
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