Cash Marketable securities Net receivables Inventories Total current assets Gross fixed assets Less: Accumulated depreciation Net fixed assets Total assets Accounts payable Notes payable Other current liabilities Long-term debt Total liabilities Common stock Retained earnings Total liabilities and equity Note: Total sources must equal total uses. Jan. 1 $ 7 0 30 53 $ 90 75 (25) $ 50 $140 $18 35 15 8 $44 29 67 $140 Dec. 31 $15 11 22 75 $123 125 (35) $ 90 $ 213 $ 15 15 7 24 $ 61 57 95 $ 213 Change Source Use
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.
7-10- The consolidated balance sheets for Lloyd Lumber Company at the beginningand end of 2015 follow. The company bought $50 million worth of fixed assets.The charge for depreciation in 2015 was $10 million. Net income was $33 mil-lion, and the company paid out $5 million in dividends
.a.Fill in the amount of the source or use in the appropriate column.
b.Prepare a statement of cash flows.c.Briefly summarize your findings.
c. Summarize your findings
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