Elliptical Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepared for the year ended June 30, 20Y6: Elliptical Consulting End-of-Period Spreadsheet For the Year Ended June 30, 20Y6 Unadjusted Adjusted Trial Balance Adjustments Trial Balance Account Title Dr. Cr. Dr. Cr. Dr. Cr. Cash 27,000 27,000 Accounts Receivable 53,500 53,500 Supplies 3,000 (a) 2,100 900 Office Equipment 30,500 30,500 Accumulated Depreciation 4,500 (b) 1,500 6,000 Accounts Payable 3,300 3,300 Salaries Payable (c) 375 375 Jayson Neese, Capital 82,200 82,200 Jayson Neese, Drawing 2,000 2,000 Fees Earned 60,000 60,000 Salary Expense 32,000 (c) 375 32,375 Supplies Expense (a) 2,100 2,100 Depreciation Expense (b) 1,500 1,500 Miscellaneous Expense 2,000 2,000 150,000 150,000 3,975 3,975 151,875 151,875 Based on the preceding spreadsheet, prepare a balance sheet for Elliptical Consulting. Elliptical ConsultingJune 30, 20Y6 Assets Current assets: $- Select - - Select - - Select - Total current assets Property, plant, and equipment: $- Select - - Select - Total property, plant, and equipment Total assets Liabilities Current liabilities: $- Select - - Select - Total liabilities Owner's Equity - Select - Total liabilities and owner's equity
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.
Elliptical Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepared for the year ended June 30, 20Y6:
| Elliptical Consulting | ||||||||
| End-of-Period Spreadsheet | ||||||||
| For the Year Ended June 30, 20Y6 | ||||||||
| Unadjusted | Adjusted | |||||||
| Adjustments | Trial Balance | |||||||
| Account Title | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | ||
| Cash | 27,000 | 27,000 | ||||||
| Accounts Receivable | 53,500 | 53,500 | ||||||
| Supplies | 3,000 | (a) 2,100 | 900 | |||||
| Office Equipment | 30,500 | 30,500 | ||||||
| 4,500 | (b) 1,500 | 6,000 | ||||||
| Accounts Payable | 3,300 | 3,300 | ||||||
| Salaries Payable | (c) 375 | 375 | ||||||
| Jayson Neese, Capital | 82,200 | 82,200 | ||||||
| Jayson Neese, Drawing | 2,000 | 2,000 | ||||||
| Fees Earned | 60,000 | 60,000 | ||||||
| Salary Expense | 32,000 | (c) 375 | 32,375 | |||||
| Supplies Expense | (a) 2,100 | 2,100 | ||||||
| Depreciation Expense | (b) 1,500 | 1,500 | ||||||
| Miscellaneous Expense | 2,000 | 2,000 | ||||||
| 150,000 | 150,000 | 3,975 | 3,975 | 151,875 | 151,875 |
Based on the preceding spreadsheet, prepare a balance sheet for Elliptical Consulting.
Elliptical ConsultingJune 30, 20Y6
| Assets | ||
| Current assets: | ||
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$- Select - | |
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- Select - | |
|
|
- Select - | |
| Total current assets | ||
| Property, plant, and equipment: | ||
|
|
$- Select - | |
|
|
- Select - | |
| Total property, plant, and equipment | ||
| Total assets | ||
| Liabilities | ||
| Current liabilities: | ||
|
|
$- Select - | |
|
|
- Select - | |
| Total liabilities | ||
| Owner's Equity | ||
|
|
- Select - | |
| Total liabilities and owner's equity |
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