10 January Ronald introduced $13,000 cash as capital 11 January Ronald bought a machine for $10,000 by cash 10 January Pays a rent bill of $3,600 for the 18 months 12 January Purchased merchandise inventory for $1,800 cash 12 January Paid transportation expenses for merchandise inventory, $50 14 January Sold inventories on credit for $1,222. Cost of these sales are $839. 16 January Cash received from trade receivables amounted to $192 31 January Cash sales during January were $1,956. Cost of these sales is 1,600 31 January Depreciation is to be calculated on a straight line basis and recorded as $100 Required Prepare: (i) general journal for the transactions; (ii) ledger accounts showing descriptions and balances; (iii) a trial balance;
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.
10 January Ronald introduced $13,000 cash as capital
11 January Ronald bought a machine for $10,000 by cash
10 January Pays a rent bill of $3,600 for the 18 months
12 January Purchased merchandise inventory for $1,800 cash
12 January Paid transportation expenses for merchandise inventory, $50
14 January Sold inventories on credit for $1,222. Cost of these sales are $839.
16 January Cash received from trade receivables amounted to $192
31 January Cash sales during January were $1,956. Cost of these sales is 1,600
31 January
Required
Prepare:
(i) general journal for the transactions;
(ii) ledger accounts showing descriptions and balances;
(iii) a
BUT WE HAVE COMPLETED ONLY 9 CHAPTERS IN PRINCIPLES OF ACCOUNTING BY Marian Powers, Susan V Crosson, Belverd E Needles, so assuming this information we have to create general journa
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