The comparative financial statements prepared at December 31, 2017, for Pinnacle Plus showed the following summarized data: Required: 1. Complete the two final columns shown beside each item in Pinnacle's comparative financial statements. (Round your percentage answers to 1 decimal place. Any decrease in the amount should be indicated with minus sign.) Income statement: Sales revenue" Cost of goods sold Gross profit Operating expenses Interest expense Income before income tax expense Income tax expense (30%) Not income Balance sheet: Cash Accounts receivable, net Inventory Property and Equipment, not Total assets Accounts payable Income tax payable Note payable, long-term Total liabilities Contributed capital (9.000 shares) Retained earningst Total liabilities and shareholders equity 2017 2016 S 117.200 $ 105,000 56.800 51,000 60,400 54,000 35.800 34,200 4.600 4,600 20,000 15,200 6.000 4,560 S 14,000 S 10,640 S 53.500 $20,460 39,400 35,000 27,400 41,000 99,800 111,000 $ 220,100 $ 207,460 S 43.400 $ 38,000 1,000 560 45,000 84,560 45,000 90.400 93,000 93,000 36,700 29,900 $ 220,100 $ 207,460 Increase (Decrease) 2017 over 2016 Amount Percentage
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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