Complete the below table to calculate income statement data in common-size percer lote: Round your percentage answers to 2 decimal places. KORBIN COMPANY Common-Size Comparative Income Statements For Years Ended December 31, 2021, 2020, and 2019 2021 2020 Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total expenses Income before taxes Income tax expense Net income % % % % 2019 % %
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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Selected comparative financial statements of Korbin Company follow.
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total expenses
Income before taxes
Income tax expense
Net income
Assets
Current assets
Comparative Income Statements
For Years Ended December 31
KORBIN COMPANY
Long-term investments
Plant assets, net
Total assets
Sales
Cost of goods sold
Gross profit
Selling expenses
Administrative expenses
Total expenses
Income before taxes
Income tax expense
Net income
2021
$ 555,000
283,500
271,500
Liabilities and Equity
Current liabilities
Common stock
Other paid-in capital
Retained earnings
Total liabilities and equity
KORBIN COMPANY
Comparative Balance Sheets
December 31
102,900
50,668
153,568
117,932
40,800
$77,132
%
2020
$ 340,000
212,500
127,500
46,920
29,920
2021
%
76,840
50,660
10,370
$ 40,290
$ 52,390
100,000
$ 152,390
0
$ 22,800
72,000
9,000
48,590
KORBIN COMPANY
Common-Size Comparative Income Statements
For Years Ended December 31, 2021, 2020, and 2019
2021
2020
$ 19,960
72,000
9,000
33,464
$152,390 $ 134,424
2020
%
2019
$ 278,000
153,900
124,100
50,800
$ 37,924
500
96,000
$ 134,424
%
2. Complete the below table to calculate income statement data in common-size percents.
Note: Round your percentage answers to 2 decimal places.
22,800
73,600
2019
50,500
15,670
$ 34,830
$ 51,748
3,950
60,000
$ 115,698
2019
$ 20,300
60,000
6,000
29,398
$ 115,698
%
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