A The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 20Y9 1 Adjusted Trial Balance 6 Account Title Dr. Cr. 8 Cash 9 Accounts Receivable 10 Supplies 11 Prepaid Insurance 12 Land 13 Buildings 14 Accumulated Depreciation–Buildings 15 Equipment 16 Accum. Depr.-Equipment 17 Accounts Payable 18 Salaries Payable 19 Unearned Rent 20 Common Stock 21 Retained Earnings 22 Dividends 23 Service Fees 24 Rent Revenue 25 Salaries Expense 26 Depreciation Expense–Equipment 27 Rent Expense 28 Supplies Expense 29 Utilities Expense 30 Depreciation Expense–Buildings 31 Repairs Expense 32 Insurance Expense 33 Miscellaneous Expense 34 11,000 28,150 6,350 9,500 75,000 250,000 117,200 240,000 151,700 33,300 3,300 1,500 25,000 195,000 20,000 468,000 5,000 291,000 17,500 15,500 9,000 8,500 6,600 3,450 3,000 5,450 1,000,000 1,000,000
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.
Financial statements and closing entries
The Gorman Group is a financial planning services firm owned and
operated by Nicole Gorman. As of October 31, 2019, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period
spreadsheet, part of which follows: (attached)
Instructions
1. Prepare an income statement, a statement of stockholders'
equity, and a
stock was issued.
2.
October 31.
3. If the balance of
$115,000 after the closing entries were posted, and the dividends
remained the same, what would have been the amount of net
income or net loss?
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