The trial balance of VILLAR REALTY for June 30, 2019 VILLAR REALTY Trial Balance June 30, 2019 DEBIT CREDIT Cash P 650,000 Accounts Receivable Prepaid Rent Prepaid insurance on Automobile Supplies on Hand Office Equipment Accumulated Depreciation-Office Equipment Automobile 100,000 108,000 28,800 9,000 90,000 P 21,600 240,000 Accumulated Depreciation- Automobile Accounts Payable Notes Payable Unearned Management Fees MVillar, Capital MVillar, drawing Sales commissions Revenue 60,000 10,800 150,000 46,800 1,337,400 705, 000 900,000 72,000 Management Service Revenue Salaries Expense Advertising Expense Automobile Expense Miscellaneous Expense 599,400 9,000 53,400 6.0.000 22,598,600 P2.598,600 TOTAL PREPARE a ten - column work sheet for the year ended June 30, 2019 using the following Data for adjustments: a. Insurance expense on automobile for the year is P14,400 b. Rent expense for the year is P72,000 c. Depreciation expense is: Office equipment, P10,800, automobile P48,000 d. Salaries incurred but unpaid as of June 30 amounts to P 9,990 e. Supplies on hand as of June 30 P 3,000 f. The unearned management fees were received and recorded on April 1, 2019 The advance payment covered 6 month's management of an apartment building E Accrued interest on notes payable, P15,000. Prepare the following financial statements: a. Income Statement b. Balance sheet C. Statement of awners equity
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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