Wolverine Realty Income Statement For the Month Ended April 30, 20YO Fees earned.. $ (a) Expenses: Wages expense. Rent expense .. Supplies expense Utilities expense Miscellaneous expense Total expenses... Net Income.. $300,000 100,000 (b) 20,000 .... 25,000 _(475,000) $ 275,000 Wolverine Realty Statement of Stockholders' Equity For the Month Ended April 30, 20Ý0 Common Retained Stock Earnings Total $ 0 (c) Balances, April 1, 20YO.. $ 0 Issued common stock.. (c) (d) Net income . (d) Dividends . $ (C) (125,000) $ (e) (125,000) $ (f) Balances, April 30, 20Y0... Wolverine Realty Balance Sheet April 30, 20YO Assets Cash $462,500 12,500 150,000 $ (g) ..... Supplles.. Land Total assets Liabilities Accounts payable . $ 100,000 Stockholders' Equity Common stock.... Retalned earnings... Total stockholders'equity. Total llabilities and stockholders' equity. $375,000 _(h) (1) Wolverine Realty Statement of Cash Flows For the Month Ended April 30, 20YO Cash flows from (used for) operating activitles: Cash recelved from customers...... Cash pald for expenses and to creditors.. Net cash flows from operating activitles . Cash flows from (used for) Investing activitles: Cash pald for land... Cash flows from (used for) financing activitles: Cash recelved from Issulng common stock Cash pald for dividends...... Net cash flows from financing activities. Net Increase (decrease) In cash .. Cash balance, April 1, 20YO Cash balance, April 30, 20YO $ (k) (387,500) $ () (m) $ (n) (0) (p) $ (q) $ () Instructions By analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through (r).
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.
Missing amounts from financial statements
The financial statements at the end of Wolverine Realty’s first month of operations are as follows:
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