Post information below to their respective ledger accounts then balance the ledger accounts. Interactive Consulting Ltd General Journal for September 2020 Date Details Acc. No. Debit ($) Credit ($) 1-Sep Cash 11 7,050 Accounts Receivable 12 1,500 Supplies 14 1,250 Office Equipment 18 7,200 Capital Stock 31 17,000 (To record assests received from Angela Smith in exchange for capital) 2-Sep Prepaid Rent 15 3,600 Cash 11 3,600 (To record prepaid rent) 3-Sep Prepaid Insurance 16 1,500 Cash 11 1,500 (To record prepaid insurance) 4-Sep Cash 11 3,500 Unearned Fees 23 3,500 (To record advance payment for services to be provided) 5-Sep Office Equipment 18 1,800 Accounts Payable 21 1,800 (To record purchasing of office equipment on account) 6-Sep Cash 11 800 Accounts Receivable 12 800 (To cash received from clients on account) 10-Sep Advertising Expense 56 120 Cash 11 120 (To record payment of newspaper advertisment) 12-Sep Accounts Payable 21 800 Cash 11 800 (To record fees earned for services provided on acccount sep 1-12) 12- Sept Accounts Receivables 12 1200 Fees earned 41 1200 (To record service provided) 13-Sep Salary Expense 51 400 Cash 11 400 (To record payment of salary) 17-Sep Cash 11 2,100 Fees Earned 41 2,100 (To record fees earned during the first half of September) 18-Sep Supplies 14 750 Cash 11 750 (To record payment of supplies) 20-Sep Accounts Receivables 12 1,100 Fees Earned 41 1,100 (To record services provided on account for the period September 13-20) 24-Sep Cash 11 1,850 Fees Earned 41 1,850 To record fees earned for the period September 17-24 25-Sep Cash 11 1,300 Accounts Receivables 12 1,300 To record cash received from clients 27-Sep Salary Expense 51 400 Cash 11 400 (To record salary expense paid) 29-Sep Utilities Expense 55 130 Cash 11 130 (To record telephone bill paid) 30-Sep Utiliities Expense 55 200 Cash 11 200 (To record electricity bill paid) 30-Sep Cash 11 1,050 Fees Earned 41 1,050 (To record fees earned for the period September 25-30) 30-Sep Fees earned 41 500 Accounts Receivable 12 500 (To record services provided on account)
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.
Post information below to their respective ledger accounts then balance the ledger accounts.
| Interactive Consulting Ltd | ||||
| General Journal for September 2020 | ||||
| Date | Details | Acc. No. | Debit ($) | Credit ($) |
| 1-Sep | Cash | 11 | 7,050 | |
| Accounts Receivable | 12 | 1,500 | ||
| Supplies | 14 | 1,250 | ||
| Office Equipment | 18 | 7,200 | ||
| Capital Stock | 31 | 17,000 | ||
| (To record assests received from Angela Smith in exchange for capital) | ||||
| 2-Sep | Prepaid Rent | 15 | 3,600 | |
| Cash | 11 | 3,600 | ||
| (To record prepaid rent) | ||||
| 3-Sep | Prepaid Insurance | 16 | 1,500 | |
| Cash | 11 | 1,500 | ||
| (To record prepaid insurance) | ||||
| 4-Sep | Cash | 11 | 3,500 | |
| Unearned Fees | 23 | 3,500 | ||
| (To record advance payment for services to be provided) | ||||
| 5-Sep | Office Equipment | 18 | 1,800 | |
| Accounts Payable | 21 | 1,800 | ||
| (To record purchasing of office equipment on account) | ||||
| 6-Sep | Cash | 11 | 800 | |
| Accounts Receivable | 12 | 800 | ||
| (To cash received from clients on account) | ||||
| 10-Sep | Advertising Expense | 56 | 120 | |
| Cash | 11 | 120 | ||
| (To record payment of newspaper advertisment) | ||||
| 12-Sep | Accounts Payable | 21 | 800 | |
| Cash | 11 | 800 | ||
| (To record fees earned for services provided on acccount sep 1-12) | ||||
| 12- Sept | Accounts Receivables | 12 | 1200 | |
| Fees earned | 41 | 1200 | ||
| (To record service provided) | ||||
| 13-Sep | Salary Expense | 51 | 400 | |
| Cash | 11 | 400 | ||
| (To record payment of salary) | ||||
| 17-Sep | Cash | 11 | 2,100 | |
| Fees Earned | 41 | 2,100 | ||
| (To record fees earned during the first half of September) | ||||
| 18-Sep | Supplies | 14 | 750 | |
| Cash | 11 | 750 | ||
| (To record payment of supplies) | ||||
| 20-Sep | Accounts Receivables | 12 | 1,100 | |
| Fees Earned | 41 | 1,100 | ||
| (To record services provided on account for the period September 13-20) | ||||
| 24-Sep | Cash | 11 | 1,850 | |
| Fees Earned | 41 | 1,850 | ||
| To record fees earned for the period September 17-24 | ||||
| 25-Sep | Cash | 11 | 1,300 | |
| Accounts Receivables | 12 | 1,300 | ||
| To record cash received from clients | ||||
| 27-Sep | Salary Expense | 51 | 400 | |
| Cash | 11 | 400 | ||
| (To record salary expense paid) | ||||
| 29-Sep | Utilities Expense | 55 | 130 | |
| Cash | 11 | 130 | ||
| (To record telephone bill paid) | ||||
| 30-Sep | Utiliities Expense | 55 | 200 | |
| Cash | 11 | 200 | ||
| (To record electricity bill paid) | ||||
| 30-Sep | Cash | 11 | 1,050 | |
| Fees Earned | 41 | 1,050 | ||
| (To record fees earned for the period September 25-30) | ||||
| 30-Sep | Fees earned | 41 | 500 | |
| Accounts Receivable | 12 | 500 | ||
| (To record services provided on account) |
Step by step
Solved in 2 steps with 5 images
