Accounts Payable Accounts Receivable Accumulated Depreciation Cash Common Stock 2,800 11,700 37 7,700 893 110 The company encountered the following events during September: Equipment Interest Payable $70 190 1,170 670 Notes Payable (long-term) Retained Earnings Supplies a. HTI provided 100 hours of regular hourly tutoring at the rate of $22 per hour, all of which was collected in cash. b. HTI paid tutors at the hourly rate of $11 per hour. On September 28, HTI paid for 90 hours of tutor time and promised to pay the remaining hours worked. TIP: The total hours of expense in b. should match the total hours of revenue in a. c. HTI hosted an all-night review session on September 29 for people cramming for midterm exams, at a special price of $10 per attendee. Rather than collect cash at the time of the review session, HTI will send bills in October to the 72 people who attended the review session. d. At the beginning of the night-long review session, HTI paid $170 cash to its tutors for wages. No additional salaries and wages will be paid for the review session. e. HTI collected $170 cash on account from students who received tutoring during the summer. HTI also collected $220 cash from a high school for a tutoring session to be held in October. g. HTI determined that depreciation for September should be $170. h. Although HTI adjusted its accounts on August 31, it has not yet paid the $37 monthly interest owed on the promissory note, for either August or September. The note is due in three years 1.HTI has only $37 of supplies left at September 30. J. HTI's income taxes are approximately 30% of income before tax. Required: 1. Prepare HTI's journal entries and adjusting journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
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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