The following selected accounts and their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 2019. 1) Prepare a multiple step income statement.
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.
![Kanpur CO.
Income Statement
For the Year Ended June 30, 2019
Expenses:
00000 Selling expenses:
Les5:cstimated feturns inventadl
COst of merciandi'se soid
Total selling expenses
Administrative expenses:
000 8
000
Total administrative expenses
Total operating expenses
00001
000
odamoo
2. Prepare a statement of owner's equity.
Kanpur Co.
Statement of Owner's Equity
For Month Ended June 30, 2019
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ACC 110
PROBLEM 6 -5B_Multiple-Step Income Statement and balance sheet
The following selected accounts and their current balances appear in the ledger of
Kanpur Co. for the fiscal year ended June 30, 2019;
ash
$92,000 Gerri Faber, Drawing
Accounts Receivable
$300,000
450,000 Sales
8,925,000
Merchandise Inventory
370,000 Cost of Merchandise Sold
5,620,000
Estimated Returns Inventory
5,000 Sales Salaries Expense
850,000
Office Supplies
10,000 Advertising Expense
420,000
12,000 Depreciation Expense-Store
Equipment
220,000 Miscellaneous Selling Expense
Prepaid Insurance
33,000
Office Equipment
18,000
Accumulated Depreciation Office
Equipment
58,000 Office Salaries Expense
540,000
Store Equipment
650,000 Rent Expense
48,000
Accumulated Depreciation-Store
Equipment
87,500 Insurance Expense
24,000
38.500 Depreciation Expense Office
Equipment
Accounts Payable
10,000
Customer Refunds Payable
10,000 Office Supplies Expense
4,000
Salaries Payable
4,000 Miscellaneous Administrative Exp.
6,000
140,000 Interest Expense
12,000
Note Payable (final payment due 2032)
Gerri Faber, Capital
431,000
Vpo ahos
quired:
Prepare a multiple-step income statement.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5953672a-8930-43ec-8e65-8d1983f2528c%2F1a01aa69-9962-4672-90e9-218a2dee9aa9%2F5vaemga_processed.jpeg&w=3840&q=75)
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