The following transactions by Africa Traders occurred during February 2021: The provisional total of the bank column in the Cash receipts journal was R9 500. The provisional total the bank column in the Cash payments journal was R7 750. The bank balance in the general ledger amounted to R6 500 (favourable) on 1 February 2021. A capital contribution of R1 000 was deposited directly into the bank account of Africa Traders. Made an electronic funds transfer to the amount of R1 427 to settle the monthly telephone bill. Bank charges for the month were R180. SA Dealers deposited R550 directly into Africa Traders bank account. Debit order in favour of SA Computers of R350 for monthly computer services. Interest of R250 received on bank favourable. What will the new total of the bank column in the Cash Payments Journal of Africa Traders at 28 February 2021 be? NB: Instructions 1. Do not type the amount with any spaces as separators for thousands (eg: 12141.72) 2. Use a full stop to indicate any decimals (eg: 1000.01) 3. You must enter cents even if it is 0 (eg .00) 4. Only show the amount, do not show the R (eg: 12141.72)
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.
The following transactions by Africa Traders occurred during February 2021:
- The provisional total of the bank column in the Cash receipts journal was R9 500.
- The provisional total the bank column in the Cash payments journal was R7 750.
- The bank balance in the general ledger amounted to R6 500 (favourable) on 1 February 2021.
- A capital contribution of R1 000 was deposited directly into the bank account of Africa Traders.
- Made an electronic funds transfer to the amount of R1 427 to settle the monthly telephone bill.
- Bank charges for the month were R180.
- SA Dealers deposited R550 directly into Africa Traders bank account.
- Debit order in favour of SA Computers of R350 for monthly computer services.
- Interest of R250 received on bank favourable.
What will the new total of the bank column in the Cash Payments Journal of Africa Traders at 28 February 2021 be?
NB: Instructions
1. Do not type the amount with any spaces as separators for thousands (eg: 12141.72)
2. Use a full stop to indicate any decimals (eg: 1000.01)
3. You must enter cents even if it is 0 (eg .00)
4. Only show the amount, do not show the R (eg: 12141.72)
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