The following is Cullumber Tours Inc's unadjusted trial balance at its year-end, November 30, 2025. The company adjusts its accour annually. Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Equipment Accumulated Depreciation-Equipment Accounts Payable Unearned Service Revenue Notes Payable (due 2028) Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Maintenance and Repairs Expense Rent Expense Interest Expense Advertising Expense Income Tax Expense Additional information: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Debit $16,290 7,780 1,175 2,540 7,464 153,980 69,700 11,310 13,340 3,605 965 1,840 $289,989 Credit $50,300 2,065 15,400 54,000 10,140 27,365 130,719 $289,989 The insurance policy has a 1-year term beginning April 1, 2025. At that time, a premium of $7,464 was paid. The equipment was acquired on December 1, 2022. The equipment is depreciated at an annual rate of $25,150. A physical count shows $440 of supplies on hand at November 30. The note payable has a 8% interest rate. Interest is paid on the first day of each following month and was last paid on November 1. Deposits of $1,540 each were received for advance tour reservations from 10 school groups. At November 30, tours have been provided for all of these groups. Employees are owed a total of $640 in salaries and wages at November 30. A senior citizens' organization that had not made an advance deposit took a river tour for $1,390. This group was not bille until December for the services performed. Additional advertising costs of $400 have been incurred, but the bills have not been received by November 30. On November 1, the company paid $2,540 rent in advance for November and December. Income taxes payable for the year are estimated to be an additional $420 beyond that recorded to date.
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
