Apex Systems Co. For the fiscal year ended in December 31,2019, are as follows: Bart Nesbit, Capital Dec.31 78,000 Jan. 1 (2019) 1,334,000 Dec.31 347,000 Bart Nesbit , Drawing Mar.31 19,500 Dec.31 78,000 June 30 19,500 Sept. 30 19,500 Dec.31 19,500 Required: Repair a statement of owners equity for the year. No additional investments were made during the year. if a net loss has been incurred or there
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.
Apex Systems Co. Offers it's services to residents in the Seattle area. Selected accounts from the Ledger of Apex Systems Co. For the fiscal year ended in December 31,2019, are as follows:
Bart Nesbit, Capital
Dec.31 78,000 Jan. 1 (2019) 1,334,000
Dec.31 347,000
Bart Nesbit , Drawing
Mar.31 19,500 Dec.31 78,000
June 30 19,500
Sept. 30 19,500
Dec.31 19,500
Required:
Repair a statement of owners equity for the year. No additional investments were made during the year. if a net loss has been incurred or there has been a decrease in owner's equity, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading.
The shareholders equity statement is prepared to know the net increase or decrease in owner’s share capital. This statement is shown under liability side of balance sheet, because capital is the liability to the company. The Net income for the accounting year would be considered and added to the capital. The drawings are reduced from it, if there is any.
This statement shows the complete review of the changes in owner’s capital worth. So, it is disclosed separately.
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