What should be the impact(add or subtract) on statement of cash flow. Increase in Cash 40,308 -cash was 378,511 beg and 418,819 endg Decrease in Account receivable 15,351 Increase in Inventories. 15,117 Increase in prepayments. 16,776 Increase in PP&E. 1,134,644 - no sale of PPE during the year Increase in accumulated depreciation-no sale of PPE during the year Increase in Other Non-operating Assets. 8711 Decrease in account payable 660 Increase in other current liabilities. 114,596 Increase in long term debt 244,285 Increase in other -operating liabilities 140,026 Increase in common stock 96,991 Increase in retained earnings 340,879 Net Income was $474,378
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.
What should be the impact(add or subtract) on statement of
Increase in Cash 40,308 -cash was 378,511 beg and 418,819 endg
Decrease in
Increase in Inventories. 15,117
Increase in prepayments. 16,776
Increase in PP&E. 1,134,644 - no sale of PPE during the year
Increase in
Increase in Other Non-operating Assets. 8711
Decrease in account payable 660
Increase in other current liabilities. 114,596
Increase in long term debt 244,285
Increase in other -operating liabilities 140,026
Increase in common stock 96,991
Increase in
Net Income was $474,378
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