Revenue and expenses information from January 1 to March 31, 2023 were: Sales Revenue of $6,300,000 COGS of 35% of Sales Interest of $150,000 Other Expenses of $200,000 SG&A of $1,260,000 Tax Rate of 35% What is the net income in the first quarter of 2023?
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.
![Use the balance sheets and information provided about revenue and expenses to answer the
question.
Stuart Company
Balance Sheet
As of December 31, 2022
(amounts in thousands)
Cash
Accounts Receivable
Inventory
Property Plant & Equipment, Gross 243,000
71,000
Accumulated Depreciation
71,000
67,000
Property Plant & Equipment, Net 172,000
235,000
28,000
302,000
Other Assets
Total Assets
373,000 Total Liabilities & Equity 373,000
Stuart Company
Balance Sheet
As of March 31, 2023
(amounts in thousands)
Cash
84,000 Accounts Payable
47,000
42,000
Accounts Receivable
Debt
Other Liabilities
Total Liabilities
Paid-In Capital
Retained Earnings
Total Equity
87,000
44,000
Accounts Payable
Debt
Other Liabilities
Total Liabilities
19,000
28,000
Inventory
50,000
29,300
Property Plant & Equipment, Gross 243,000
76,300
Accumulated Depreciation
72,100
67,000
Property Plant & Equipment, Net 170,900
235,600
Other Assets
27,000
302,600
Total Assets
378,900 Total Liabilities & Equity 378,900
28,000
34,000
9,000
Paid-In Capital
Retained Earnings
Total Equity](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F69564233-ba4b-4862-85cc-5262d8daff45%2Fac5ccf15-4df0-40d5-8a08-931095c2656a%2Fzwv01b8_processed.png&w=3840&q=75)
![Revenue and expenses information from January 1 to March 31, 2023 were:
Sales Revenue of $6,300,000
COGS of 35% of Sales
Interest of $150,000
Other Expenses of $200,000
SG&A of $1,260,000
Tax Rate of 35%
What is the net income in the first quarter of 2023?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F69564233-ba4b-4862-85cc-5262d8daff45%2Fac5ccf15-4df0-40d5-8a08-931095c2656a%2Fbhapqik_processed.png&w=3840&q=75)
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