Presented below are selected accounts of Blue Company at December 31, 2025. Inventory (finished goods) Unearned Service Revenue Equipment Inventory (work in process) Cash Debt Investments (trading) Customer Advances Restricted Cash for Plant Expansion 1. 2. 3. 4. The following additional information is available. 5. 6. $ 59,800 94,800 7. 261,700 43,100 40,000 Supplies Expense 39,500 54,800 59,500 Cost of Goods Sold Notes Receivable Accounts Receivable Inventory (raw materials) Allowance for Doubtful Accounts Licenses Additional Paid-in Capital Treasury Stock $2,113,900 40,400 170,720 183,830 55,820 12,420 16,580 80,630 22,540 Inventories are valued at lower-of-cost-or-market using LIFO. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $46,245. The short-term investments have a fair value of $27,640. The notes receivable are due April 30, 2027, with interest receivable every April 30. The notes bear interest at 6%. (Hin Accrue interest due on December 31, 2025.) The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $53,800 are pledged as collateral on a bank loan. Licenses are recorded net of accumulated amortization of $14,840. Treasury stock is recorded at cost. Prepare the current assets section of Blue Company's December 31, 2025, balance sheet, with appropriate disclosures. (List C Assets in order of liquidity Enter account name only and do not provide the descriptive information provided in the question
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.
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