can you fill out the income statement and equity statement
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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Karry no Key, Inc.
4
Income Statement
For the Month Ended May 31
n/a
n/a
n/a
n/a
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6 Sales Revenue
7
9 Wages Expense
10 Depreciation Expense
11 Insurance Expense
12
13 Interest Expense
n/a
14
n/a
15
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17
Karry no Key, Inc.
Statement of Shareholders' Equity
18
19
For the Month Ended May 31
20 Beginning Stock
21 Stock Issued
22 Ending Stock
n/a
n/a
=SUM(B20:B21)
23
24 Beginning Retained Earnings
n/a
n/a
n/a
25
26 Dividends
27 Ending Retained Earnings
28
n/a
29 Total Shareholders' Equity
30
n/a
31
32
Karry no Key, Inc.
Statement of Cash Flows
33
34
For the Month Ended May 31
35 Cash from Operating Activities:
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![Do you intend to major in one of the College of Business and Economic's majors?
Yes
Assets
Liabilities
Shareholders' Equity
Diagnostic Check
Amount
Account
Amount
Account
Amount
Account
A LSE
87,466 Cash
5,750 Inventory
138,000 Equipment
(1,150) Accumulated Depreciation
34,500 Inventory
3,450 Prepaid Insurance
(3,450) Cash
$ 111,000 Notes Payable
555 Interest Payable
$ 116,000 Stock
2,511 Retained Earnings
Balance Sheet at April 30: $
Amounts in US $
During May, Its second month of business, Karry no Key, Inc.:
Per Unit
Total
Purchased 300 karaoke machines on account
Paid for six months ofinsurance in advance; coverage that begins May1
115.00 S
5/1
34,500
34,500 Accounts Payable
True
5/1
3,450
True
During
Sold 320 karaoke machines on account:
May
Record the sale
161.00
51,520 Sales Revenue
51,520 Accounts Receivable
(36,800) Inventory
46,368 Cash
(46,368) Accounts Receivable
(20,700) Cash
(1,130) Cash
(575) Prepaid Insurance
(1,150) Accumulated Depreciation
Record the cost of the sale
115.00
(36,800) Cost of Goods Sold
True
During
Collected cash from customers from sales made on account
46,368
May
True
5/31
Paid for inventory purchased on account
20,700
(20,700) Accounts Payable
True
5/31 Declared and paid cash dividend to its shareholders
19
20
(1,130) Dividends
(575) Insurance Expense
(1,150) Depreciation Expense
(1,554) Wages Expense
(555) Interest Expense
1,130
True
Adjusted for insurance used during the month
Adjusted for depreciation on equipment (hint: refer to P1 for estimated life of equipment)
Adjusted for wages owed that will be paid in the first week of June
Adjusted for interest owed on the 6%, 3-month bank loan; interest and principal due on June 30
A1
True
A2
True
21
A3
1,554 Wages Payable
555 Interest Payable
1,554
True
22
A4
555
True
23
Column Totals
255,731
127,464
128,267
True
24
25
Chart of Accounts:
26
Accounts Payable
27
Accounts Receivable
28
Accumulated Depreciation
29
Cash
30
Cost of Goods Sold
31
Depreciation Expense
32
Dividends
33
Equipment
34
Insurance Expense
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Income Statement
The purpose of preparing the income statement is to know the net income which are derived at the end of the financial period as well.
Statement of Shareholder's Equity
The purpose of preparing the shareholders equity to know the details of the retained earnings and shares value which are involved to the business as well.
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