The following data refer to snack maker Taquitos To Go for the year 20x1. $ 8,100 13,800 Work-in-process inventory, 12/31/x0 Selling and administrative salaries Insurance on factory and equipment Work-in-process inventory, 12/31/x1 Finished-goods inventory, 12/31/x0 Cash balance, 12/31/x1 Indirect material used 3,000 8,300 Depreciation on factory equipment Raw-material inventory, 12/31/x0 Property taxes on factory Finished-goods inventory, 12/31/x1 Purchases of raw material in 20x1 14,000 6,000 4,900 2,100 10,100 2,400 3. Prepare the company's income statement for 20x1. 15,400 30,000 6,000 2,500 4,000 Utilities for factory Utilities for sales and administrative offices Other selling and administrative expenses Indirect-labor cost incurred 20,000 Depreciation on factory building 3,800 Depreciation on cars used by sales personnel 1,200 Direct-labor cost incurred 70,000 Raw-material inventory, 12/31/x1 11,000 Accounts receivable, 12/31/x1 4,100 Rental for warehouse space to store raw material3, 100 Rental of space for company president's office 1,700 Applied manufacturing overhead Sales revenue 58,000 205,800 5,100 Income tax expense 1. Prepare Taquitos To Go's schedule of cost of goods manufactured for 20x1. 2. Prepare the company's schedule of cost of goods sold for 20x1. The company closes overapplied or underapplied overhead into Cost of Goods Sold.
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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