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Lola's Company Balance Sheet December 31st, 2020 Assets Cash and Cash Equivalents $100,000 Accounts Receivable $150,000 Inventory $200,000 Prepaid Expenses $50,000 Property, Plant and Equipment $500,000 Total Assets $1,000,000 Liabilities Accounts Payable $100,000 Notes Payable $200,000 Accrued Expenses $50,000 Total Liabilities $350,000 Owner's Equity Common Stock $250,000 Retained Earnings $400,000 Total Owner's Equity $650,000 Total Liabilities and Owner's Equity $1,000,000 Statement of Owner's Equity December 31st, 2020 Owner's Equity at Beginning of Year $400,000 Net Income for the Year $130,000 Issuance of Common Stock $50,000 Dividends Paid ($30,000) Owner's Equity at End of Year $550,000 Lola's Company Statement of Cash Flow December 31st, 2020 Cash Flows from Operating Activities Net Income Depreciation Expense $100,000 $50,000 Increase in Accounts Receivable ($30,000) Increase in Inventory Decrease in Prepaid Expenses $10,000 ($20,000) Net Cash Provided by Operating Activities $110,000 Cash Flows from Investing Activities Purchase of Property, Plant and Equipment ($100,000) Net Cash Used in Investing Activities ($100,000) Cash Flows from Financing Activities Proceeds from Issuance of Common Stock $50,000 Repayment of Notes Payable ($30,000) Net Cash Provided by Financing Activities $20,000 Net Increase in Cash and Cash Equivalents $30,000 Income Statement December 31st, 2020 Revenue Sales Revenue $500,000 Interest Income $10,000 Total Revenue $510,000 Expenses Cost of Goods Sold ($200,000) Depreciation Expense ($50,000) Salaries and Wages Expense ($100,000) Rent Expense ($30,000) Total Expenses ($380,000) Net Income $130,000

Lola's Company Balance Sheet December 31st, 2020 Assets Cash and Cash Equivalents $100,000 Accounts Receivable $150,000 Inventory $200,000 Prepaid Expenses $50,000 Property, Plant and Equipment $500,000 Total Assets $1,000,000 Liabilities Accounts Payable $100,000 Notes Payable $200,000 Accrued Expenses $50,000 Total Liabilities $350,000 Owner's Equity Common Stock $250,000 Retained Earnings $400,000 Total Owner's Equity $650,000 Total Liabilities and Owner's Equity $1,000,000 Statement of Owner's Equity December 31st, 2020 Owner's Equity at Beginning of Year $400,000 Net Income for the Year $130,000 Issuance of Common Stock $50,000 Dividends Paid ($30,000) Owner's Equity at End of Year $550,000 Lola's Company Statement of Cash Flow December 31st, 2020 Cash Flows from Operating Activities Net Income Depreciation Expense $100,000 $50,000 Increase in Accounts Receivable ($30,000) Increase in Inventory Decrease in Prepaid Expenses $10,000 ($20,000) Net Cash Provided by Operating Activities $110,000 Cash Flows from Investing Activities Purchase of Property, Plant and Equipment ($100,000) Net Cash Used in Investing Activities ($100,000) Cash Flows from Financing Activities Proceeds from Issuance of Common Stock $50,000 Repayment of Notes Payable ($30,000) Net Cash Provided by Financing Activities $20,000 Net Increase in Cash and Cash Equivalents $30,000 Income Statement December 31st, 2020 Revenue Sales Revenue $500,000 Interest Income $10,000 Total Revenue $510,000 Expenses Cost of Goods Sold ($200,000) Depreciation Expense ($50,000) Salaries and Wages Expense ($100,000) Rent Expense ($30,000) Total Expenses ($380,000) Net Income $130,000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Look at the financial statements. What is the analysis on each of the following:

Income Statement, Balance Sheet, Statement of Owner’s equity, and Statement of Cash flow.

Lola's Company Balance Sheet December 31st, 2020 Assets Cash and Cash Equivalents $100,000 Accounts Receivable $150,000 Inventory $200,000 Prepaid Expenses $50,000 Property, Plant and Equipment $500,000 Total Assets $1,000,000 Liabilities Accounts Payable $100,000 Notes Payable $200,000 Accrued Expenses $50,000 Total Liabilities $350,000 Owner's Equity Common Stock $250,000 Retained Earnings $400,000 Total Owner's Equity $650,000 Total Liabilities and Owner's Equity $1,000,000 Statement of Owner's Equity December 31st, 2020 Owner's Equity at Beginning of Year $400,000 Net Income for the Year $130,000 Issuance of Common Stock $50,000 Dividends Paid ($30,000) Owner's Equity at End of Year $550,000 Lola's Company Statement of Cash Flow December 31st, 2020 Cash Flows from Operating Activities Net Income Depreciation Expense $100,000 $50,000 Increase in Accounts Receivable ($30,000) Increase in Inventory Decrease in Prepaid Expenses $10,000 ($20,000) Net Cash Provided by Operating Activities $110,000 Cash Flows from Investing Activities Purchase of Property, Plant and Equipment ($100,000) Net Cash Used in Investing Activities ($100,000) Cash Flows from Financing Activities Proceeds from Issuance of Common Stock $50,000 Repayment of Notes Payable ($30,000) Net Cash Provided by Financing Activities $20,000 Net Increase in Cash and Cash Equivalents $30,000 Income Statement December 31st, 2020 Revenue Sales Revenue $500,000 Interest Income $10,000 Total Revenue $510,000 Expenses Cost of Goods Sold ($200,000) Depreciation Expense ($50,000) Salaries and Wages Expense ($100,000) Rent Expense ($30,000) Total Expenses ($380,000) Net Income $130,000
Transcribed Image Text:Lola's Company Balance Sheet December 31st, 2020 Assets Cash and Cash Equivalents $100,000 Accounts Receivable $150,000 Inventory $200,000 Prepaid Expenses $50,000 Property, Plant and Equipment $500,000 Total Assets $1,000,000 Liabilities Accounts Payable $100,000 Notes Payable $200,000 Accrued Expenses $50,000 Total Liabilities $350,000 Owner's Equity Common Stock $250,000 Retained Earnings $400,000 Total Owner's Equity $650,000 Total Liabilities and Owner's Equity $1,000,000 Statement of Owner's Equity December 31st, 2020 Owner's Equity at Beginning of Year $400,000 Net Income for the Year $130,000 Issuance of Common Stock $50,000 Dividends Paid ($30,000) Owner's Equity at End of Year $550,000 Lola's Company Statement of Cash Flow December 31st, 2020 Cash Flows from Operating Activities Net Income Depreciation Expense $100,000 $50,000 Increase in Accounts Receivable ($30,000) Increase in Inventory Decrease in Prepaid Expenses $10,000 ($20,000) Net Cash Provided by Operating Activities $110,000 Cash Flows from Investing Activities Purchase of Property, Plant and Equipment ($100,000) Net Cash Used in Investing Activities ($100,000) Cash Flows from Financing Activities Proceeds from Issuance of Common Stock $50,000 Repayment of Notes Payable ($30,000) Net Cash Provided by Financing Activities $20,000 Net Increase in Cash and Cash Equivalents $30,000 Income Statement December 31st, 2020 Revenue Sales Revenue $500,000 Interest Income $10,000 Total Revenue $510,000 Expenses Cost of Goods Sold ($200,000) Depreciation Expense ($50,000) Salaries and Wages Expense ($100,000) Rent Expense ($30,000) Total Expenses ($380,000) Net Income $130,000
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