The following is a trial balance for Marv's Diner: Debit Credit Cash $7,750 Accounts Receivable 1,400 Food and Beverage Inventory 3,400 Office Supplies 900 Prepaid Rent 800 Equipment 75,000 Accumulated Depreciation, Equipment $8,000 Accounts Payable 4,230 Notes Payable 28,200 Marv Kamp, Capital 48,500 Bood and Beverage Revenue 80,500 Cost of Food and Beverage Sold 35,880 Wages and Benefits 31,000 Rent Expense 8,800 Office Supplies Expense 1,000 Interest Expense 3,500 Total $169,430 $169,430 REQUIRED: 1. Post the following adjusting entries to the proper T accounts: Debit Credit a December 31 Cost of Food and Beverage Sold $750 Food and Beverage Inventory $750 b December 31 Office Supplies Expense $90 Office Supplies $90 c December 31 Depreciation Expense $4,000 Accumulated Depreciation Expense $4,000 d December 31 Rent Expense $800 Prepaid Rent $800 e December 31 Wages and Benefits $1,050 Accrued Wages $1,050 2. Prepare an Adjusted Trial Balance
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 is a
| Debit | Credit | |
| Cash | $7,750 | |
| 1,400 | ||
| Food and Beverage Inventory | 3,400 | |
| Office Supplies | 900 | |
| Prepaid Rent | 800 | |
| Equipment | 75,000 | |
| $8,000 | ||
| Accounts Payable | 4,230 | |
| Notes Payable | 28,200 | |
| Marv Kamp, Capital | 48,500 | |
| Bood and Beverage Revenue | 80,500 | |
| Cost of Food and Beverage Sold | 35,880 | |
| Wages and Benefits | 31,000 | |
| Rent Expense | 8,800 | |
| Office Supplies Expense | 1,000 | |
| Interest Expense | 3,500 | |
| Total | $169,430 | $169,430 |
REQUIRED:
1. Post the following
| Debit | Credit | |||
| a | December 31 | Cost of Food and Beverage Sold | $750 | |
| Food and Beverage Inventory | $750 | |||
| b | December 31 | Office Supplies Expense | $90 | |
| Office Supplies |
$90 |
|||
| c | December 31 | Depreciation Expense | $4,000 | |
| Accumulated Depreciation Expense | $4,000 | |||
| d | December 31 | Rent Expense | $800 | |
| Prepaid Rent | $800 | |||
| e | December 31 | Wages and Benefits |
$1,050 |
|
| Accrued Wages | $1,050 |
2. Prepare an Adjusted Trial Balance
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