Role, Timing, and Mechanics of Accounting Essay Example | Topics and Well Written Essays - 750 words

Role, Timing, and Mechanics of Accounting - Essay Example B) The other piece of information required can be the storage of dates on the entries so that they come in handy for the proper management of records and so that the company can reflect back and learn from the decisions taken in the past C) Cats and Dogs Company Trading and Profit and Loss Account Extract for the month of March Sales Less: Expenses Interest Expenses Profit $ 20 650 $ 900 (675) 225 Cats and Dogs Company Retained Earning Statement Extract for the month of March Retained Earning Beginning Net Profit Less Dividends Retained Earnings At End $ xxx 225 (25) $ 200 Cats and Dogs Company Balance Sheet Extract for the month of March Assets Cash Short Term Liabilities Interest Payable Long Term Liability Notes Payable Owner's Equity Capital Retained Earnings $ $ 2000 6000 200 $ 15325 20 6200 8220 Cats and Dogs Company Cash Flow Statement Extract for the month of March Cash from Operating Activities Services Expenses Cash from Investing Activities Capital Cash flows from Financing Activities Notes Drawings/Dividends Net Increase in Cash $ $ 9000 (650) 2000 (25) $ 8350 6000 1975 16325 Part Two A) a. The equipment (purchased on January 1, 2003) has a useful life of 12 years with no salvage value (Straight-line method is used). Depreciation 70000 Accumulated Depreciation 70000 The cost of the asset decreases by 70000 b. Interest accrued on the bonds payable is $20,000 as of December 31, 2003. Interest Expense 20000 Interest Payable 20000 The liabilities increase by 20000 c. Unexpired insurance at December 31, 2003 is $7,000. This would increase the assets by 7000 d. The rent payment of $140,000 covered the four months from December 1, 2003 through March 31, 2004. Interest Prepaid 105000 Cash 105000 This would have no affect as one assets increase while the other asset decreases e. Salaries and wages of $28,000 were earned but unpaid at December 31, 2003. Salaries Expense 28000 Salaries Accrued 28000 The liabilities would increase by 28000 B) 1) Trading and profit and loss account 2) Balance sheet-current assets 3) Balance sheet-current liabilities 4) Balance sheet-current assets 5) Balance sheet-current assets 6) Balance sheet-Property plant and equipment 7) Balance sheet-current assets 8) Balance sheet-current assets 9) Balance sheet-current assets 10) Balance sheet-stock holder's equity 11) Trading and profit and loss account 12) Trading and profit and loss account References 1) Hagen, K. M. (2005). How To Prepare a Cash Flow Statement. Retrieved February 17, 2008, from Googo Bits: http://www.googobits.com/articles/932-how-to-prepare-a-cash-flow-statement.html 2) Preparing the Financial Statements. (2007). Retrieved February 17, 2008, from Net MBA: http://www.netmba.com/accounting/fin/process/statements/ 3) Sangster, Alan & Wood, Frank (1999), "Business Accounting 2", Eighth