Student Name Bandar Aldawsari Class M W 10 11:15 AM Problem

P02 02astudent Namebandar Aldawsariclassm W 10 1115 Amproblem 02 02

Cleaned assignment instructions: Analyze the provided financial transactions and prepare the related financial statements and ledger entries for Venture Consultants and Graham Company. This includes posting journal entries, preparing trial balances, income statements, statements of owner’s equity, balance sheets, and cash flow statements based on the given data. Ensure accuracy in balances, calculations, and formatting as per standard accounting practices.

Paper For Above instruction

Introduction

Accurate financial reporting is essential for understanding a company's financial health and making informed business decisions. This paper examines the detailed financial transactions of Venture Consultants and Graham Company, illustrating the process of recording journal entries, preparing ledger accounts, trial balances, and final financial statements. The process demonstrates fundamental accounting principles such as double-entry bookkeeping, accrual accounting, and proper statement preparation, culminating in a comprehensive understanding of these financial procedures.

Venture Consultants: Journal Entries and Ledger Posting

The initial step involves recording the transactions of Venture Consultants into the general journal. For example, on March 1, the owner’s investment of cash and office equipment was recorded with debit entries to Cash and Office Equipment and a credit to D. Brooks, Capital. These entries reflect increased assets and owner’s equity. Similarly, other transactions such as prepaid rent, purchases on credit, service revenues, collections, owner withdrawals, and utility expenses are journalized accurately, reflecting their impact on the company's financial position.

Once journalized, these entries are posted to respective ledger accounts. For instance, the Cash account records debits from investments, collections, and accounts payable payments, and credits from utility bills and owner withdrawals. The account balances are subsequently calculated, leading to the preparation of trial balances that verify the equality of total debits and credits.

Trial Balance and Adjustments

The trial balance for Venture Consultants on March 30 was prepared by totaling all debits and credits from ledger accounts. The process ensures that the accounting equation remains balanced. For example, the Cash account ending balance was calculated after considering all transactions to verify the ledger’s correctness. Adjustments, if any, are incorporated at this stage to align the books with actual financial conditions.

Graham Company: Financial Statements Preparation

Graham Company's financial activities during May were used to prepare the income statement, statement of owner’s equity, balance sheet, and cash flow statement. The income statement summarizes revenues and expenses, resulting in net income, which is then reflected in the statement of owner’s equity. The balance sheet displays assets, liabilities, and equity at the period’s end, confirming that total assets equal total liabilities plus equity.

The cash flow statement details cash movements from operating, investing, and financing activities, highlighting how cash is generated and utilized during the period. The accuracy of these statements depends on precise ledger posting and trial balance preparation. For instance, the net cash provided by operating activities was derived from cash received from customers versus cash paid for expenses.

Conclusion

Throughout these processes, adhering to accounting standards ensures transparency and consistency. Accurately recording transactions, maintaining balanced ledgers, and preparing financial statements provide vital insights into the company's performance. For Venture Consultants and Graham Company, these procedures reveal their financial positions and operational results, serving as essential tools for stakeholders.

References

  1. Wild, J. J., Chew, D. H., & Subramanyam, K. R. (2020). Financial Accounting (12th ed.). McGraw-Hill Education.
  2. Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2019). Intermediate Accounting (16th ed.). Wiley.
  3. Brigham, E. F., & Houston, J. F. (2022). Fundamentals of Financial Management (15th ed.). Cengage Learning.
  4. Horngren, C. T., Harrison, W. T., & Oliver, M. (2019). Financial & Managerial Accounting (7th ed.). Pearson.
  5. Schmidt, J. D., & Udell, G. F. (2018). Accounting Principles: A Business Perspective (11th ed.). South-Western College Publishing.
  6. Gibson, C. H. (2021). Financial Reporting & Analysis (14th ed.). Cengage Learning.
  7. Penman, S. H. (2018). Financial Statement Analysis and Security Valuation. McGraw-Hill Education.
  8. Ray, S., & Sharma, R. (2017). Fundamentals of Accounting. Pearson India.
  9. Anthony, R. N., & Govindarajan, V. (2019). Management Control Systems (13th ed.). McGraw-Hill Education.
  10. Stickney, C. P., Brown, P., & Wahlen, J. M. (2020). Financial Accounting: An Introduction to Concepts, Methods, and Uses. Cengage Learning.

Related Assignments