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Paper Topic:

Unit 3 IP Statement of Financial Position - Introduction to Accounting

Income Statement for the four months ending August 31 , 2008

Sales 4 ,250 500 ) 4 ,750

Operating Expenditure

Supplies 400

Gasoline , Weed eater cord and other supplies 50

Wages (1 ,900 200 ) 2 ,100

Repair Costs 300

Depreciation on Trailer (300 /3 ) 100 Net Income 1 ,800 Balance Sheet as at August 31 , 2009

Non-Current Assets Trailer (300 - 100

200

Leased Mower

400 600

Current Assets Accounts Receivable 500

Prepaid Lease (600 x 2 /6 ) 200

Bank 690

br Current Liabilities

br Wages Payable 200

Gasoline , Weed eater cord and other supplies due 50

br Working Capital

1 ,140 1 ,740

Financed By Capital

400

Net Income

1 ,800

Drawings

460 1 ,740

Maltbee was successful in his work because he managed to attain a net income of 1 ,800 , which led to an increase in the financial wealth of the business . Positive trends are also outlined in the cash flow of the firm , since he managed to increase the cash balance by 290 despite the capital expenditure and loan repayment that he undertook

Steps in the Accounting Cycle

Identify the transaction

Analyze the transaction - determine the accounts that will be affected by such transaction

Record transaction in the Journal

Post transaction to appropriate accounts in the ledger

Prepare a trial balance

Record adjusting entries in the Journal

Post adjusting entries in the appropriate accounts in the ledger

Prepare an adjusted trial balance

Prepare the financial statements of the firm...

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