Umbrella Corporation End-of-Period Spreadsheet For the Year Ended December 31, 2002 Unadjusted Adjusted Trial Balance Adjustments Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 11,800 11,800 Accounts Receivable 37,500 11,300 48,800 Supplies 2,840 2,000 840 Prepaid Insurance 4,200 4,000 200 Land 98,000 98,000 Building Accumulated Depreciation - Building 450,000 450,000 230,000 11,000 241,000 Equipment 107,000 107,000 Accumulated Depreciation - Equipment 87,300 6,550 93,850 Accounts Payable 21,690 21,690 Wages Payable 5,900 5,900 Common Stock 75,000 75,000 Retained Earnings 145,000 145,000 Dividends 10,000 10,000 Fees Earned 363,700 11,300 375,000 Wages Expense 160,000 5,900 165,900 Advertising Expense 18,000 18,000 Insurance Expense 4,000 4,000 Utilities Expense 11,000 11,000 Supplies Expense 2,000 2,000 Depreciation Expense - Building 11,000 11,000 Repairs Expense 8,050 8,050 Depreciation Expense - Equipment 6,550 6,550 Miscellaneous Expense 4,300 4,300 922,690 922,690 40,750 40,750 957,440 957,440
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.
Umbrella Corporation provides consulting for virology and pharmaceutical research. Umbrella Corporation prepared the following end-of-period spreadsheet at December 31, 2002, the end of the fiscal year:
- Prepare an income statement for the year ended December 31.
- Prepare a
retained earnings statement for the year ended December.31. - Prepare a
balance sheet as of December 31. - Based upon the end-of-period spreadsheet, journalize the closing entries.
- Prepare a post-closing
trial balance .
(I primarilly need help with #5 post closing trial balance).
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