Exercises E Min Stock Accounts Accumulated Accounts Holders

Exercises E min) Stock– Accounts (Accum. Accounts holders' Cash + receivable + Inventory + Furniture + deprec.) = payable + equity Feb. 28 balance + + + + = + Pmts for inventory + + + + = + Pmts on account + + + + = + Depreciation + + + + = + Cost of goods sold + + + + = + Other expenses + + + + = + Sales on credit + + + + = + Cash receipts + + + + = + March 31 balance + + + + = + Omas Budgeted Balance Sheet March 31, 2011 Assets Liabilities Stockholders' Equity

This assignment involves analyzing and preparing a budgeted balance sheet for Omas as of March 31, 2011, based on various financial transactions and account balances. The task requires understanding how different accounts interact within a company's accounting framework, especially focusing on assets, liabilities, and stockholders’ equity. The key components include cash, receivables, inventory, furniture, depreciation, payable accounts, and equity. The exercise emphasizes the importance of tracking account balances at the beginning and end of the period, along with recording transactions such as payments for inventory and accounts payable, depreciation expenses, cost of goods sold, other expenses, credit sales, and cash receipts. These elements collectively influence the overall financial position of the company, culminating in the preparation of a comprehensive budgeted balance sheet that accurately reflects the company’s expected assets, liabilities, and stockholders' equity as of March 31, 2011.

Paper For Above instruction

The purpose of this paper is to analyze the financial activities of Omas Company during the period leading up to March 31, 2011, and to prepare a budgeted balance sheet based on the transactions and account balances provided. This process involves examining the beginning balances, recording the transactions, and calculating the ending balances to effectively reflect the company's financial position as of the specified date.

Initially, understanding the structure of the company's accounts is essential. Omas manages a range of assets—cash, receivables, inventory, and furniture—as well as accrued depreciation. Its liabilities include accounts payable, while its equity encompasses the owners’ interests. The balance sheet equation, Assets = Liabilities + Stockholders’ Equity, must always be maintained. Therefore, changes in assets come from various transactions like purchases, sales, receipt of cash, and expenses, while liabilities are affected by payments on accounts payable, depreciation, and expenses incurred during the period.

The starting point is the beginning balances as of February 28, 2011. These balances include cash, receivables, inventory, furniture, accumulated depreciation, accounts payable, and owner's equity. Throughout March, several activities occur, such as payments for inventory, payments on accounts payable, recording depreciation, cost of goods sold, other expenses, credit sales, and cash receipts. Each of these transactions affects the respective accounts, ultimately determining the ending balances at March 31, 2011.

Payments for inventory, for instance, reduce cash and accounts payable when purchases are made on credit, or directly decrease cash if paid outright. Payments on account further reduce cash and accounts payable. Depreciation increases expenses and accumulated depreciation, decreasing net asset value. The cost of goods sold impacts inventory and expenses, affecting net income and retained earnings. Other expenses directly decrease cash and impact expenses. Sales on credit increase receivables and revenue, while cash receipts boost cash assets. Each of these movements influences the structure of the balance sheet.

Constructing the budgeted balance sheet involves summarizing all account balances after these activities. Assets such as cash, receivables, inventory, and furniture are adjusted based on the transactions. For example, cash decreases due to payments and expenses but increases with cash receipts. Accounts receivable increase with credit sales and decrease with cash collections. Inventory changes depend on purchases and cost of goods sold. Furniture remains constant unless disposed of or purchased.

Liabilities, notably accounts payable, decrease with payments made. Depreciation increases accumulated depreciation, reducing asset book value. Expenses impact net income but may also influence retained earnings, contributing to stockholders' equity. The ending balance of stockholders' equity is computed by adding net income and applying any dividends or distributions, if applicable, to the beginning balance.

The final step involves assembling the balanced sheet with updated figures. The total assets must equal the sum of liabilities and stockholders’ equity, reflecting accurate financial positioning of Omas as of March 31, 2011. The process underscores the importance of meticulous record-keeping and understanding of how individual transactions impact the overall financial health of the company.

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