Presented below are selected ledger accounts of Oriole Corporation as of December 31, 2017. Cash $68,000 Administrative expenses 106,700 Selling expenses 83,090 Net sales 544,700 Cost of goods sold 265,900 Cash dividends declared (2017) 22,650 Cash dividends paid (2017) 22,000 Discontinued operations (loss before income taxes) 41,200 Depreciation expense, not recorded in 2016 36,000 Retained earnings, December 31, 2016 96,390 Effective tax rate 30% (a) Net income $ 33,467 (b) Prepare a partial income statement beginning with income from continuing operations before income tax, and including appropriate earnings per share information. Assume 19,480 shares of common stock were outstanding during 2017. (Round earnings per share to 2 decimal places, e.g. 1.58.) ORIOLE CORPORATION Income 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.
| Cash | $68,000 | |
| Administrative expenses | 106,700 | |
| Selling expenses | 83,090 | |
| Net sales | 544,700 | |
| Cost of goods sold | 265,900 | |
| Cash dividends declared (2017) | 22,650 | |
| Cash dividends paid (2017) | 22,000 | |
| Discontinued operations (loss before income taxes) | 41,200 | |
| 36,000 | ||
| 96,390 | ||
| Effective tax rate 30% |
(a)
| Net income |
$ 33,467
|
(b) Prepare a partial income statement beginning with income from continuing operations before income tax, and including appropriate earnings per share information. Assume 19,480 shares of common stock were outstanding during 2017. (Round earnings per share to 2 decimal places, e.g. 1.58.)
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ORIOLE CORPORATION
Income Statement |
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An income statement is the one prepared by the company to determine the company's financial performance by considering all the revenue and expenses and calculating the net income or loss.
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