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Author : lilla40
Finance & Accounting
Pages 5 (1255 words)
COARSEWORK : Question 3: Savannah Enterprise Balance Sheet As of December 31, 2012 Savannah Enterprise Balance sheet (thousands) As of December 31, 2012 Assets Cash 28.16 Inventory 1.60 Delivery Equipment 15.00 Accumulated Depreciation (5.00) 10.00 Computer 2.00 Accumulated Depreciation (1.00) 1.00 Postage and Packing 0.35 total 41.11 Liabilities Accounts Payable 6.00 Utilities payable 0.80 Commissions payable 1.50 8.30 Capital Savannah, Capital beginning 35.00 Net profit 8.21 Savannah, drawing (10.40) 32.81 Total Liabilities & Capital 41.11 Balance Sheet The balance sheet is composed of several ma…
The total liabilities amount is $ 8,300 during the same accounting period. The total Capital end is $ 32,810 during the same accounting year (Black, 2009; Crosson, 2009). The balance sheet is based on the accrual basis of accounting. The accrual basis accounting states that the records its revenues or sales during the accounting period they were earned, not on the day they were paid by the customers. Consequently, the sales made to current and future customers on account are debited to Accounts receivable or Notes receivable. In like manner, the Sales or Revenue account is credited. On the other hand, the cash basis accounting records revenues or sales only during the time when the sales amounts are paid by the customers, not when the revenues or sales were earned. Similarly, the accrual basis of accounting records expenses during the accounting period when they are incurred (Nikolai, 2009). ...