To: Owner of Earl Coffee Roasters Corp. Subject: Opinion of net income, dividends, financial position, and cash flows. Revenues totaled Your first month of operations was These operating results look The company your investment. able to pay a dividend, which should make you very Your financial position looks stockholders' equity is as your Operating activities generated cash of which is of cash come from operating activities. You ended the month with cash of Based on the above facts, I believe you should and net income was with such a return on Your as companies prefer to have their largest source
To: Owner of Earl Coffee Roasters Corp. Subject: Opinion of net income, dividends, financial position, and cash flows. Revenues totaled Your first month of operations was These operating results look The company your investment. able to pay a dividend, which should make you very Your financial position looks stockholders' equity is as your Operating activities generated cash of which is of cash come from operating activities. You ended the month with cash of Based on the above facts, I believe you should and net income was with such a return on Your as companies prefer to have their largest source
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:O
Statement of Retained Earnings
Earl Coffee Roasters Corp.
Statement of Retained Earnings
Month Ended August 31, 2022
Retained earnings, August 1, 2022
Add: Net income
Subtotal
Less: Dividends
Retained earnings, August 31, 2022
O Questi
O Questi
O Questi
O Questi
Calculat
Print
Balance Sheet
Assets
Cash
Office supplies
Equipment
Total assets
Done
$
$
$
0
187,100
187,100
(2,500)
184,600
- X
$ 218,200
Income Statement
5,200 Accounts payable
7,300
205,700
Revenue
Earl Coffee Roasters Corp.
Balance Sheet
August 31, 2022
Common stock
Expenses:
Service revenue
Earl Coffee Roasters Corp.
Income Statement
Month Ended August 31, 2022
Salary expense
Utilities expense
Rent expense
Total expenses
Net income (loss)
Liabilities
Stockholders' Equity
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
$
$
$
- X
8,600
78,700
5,700
1,700
25,000
184,600
209,600
218,200
$ 273,200
$
86,100
187,100
Statement of Cash Flows
Earl Coffee Roasters Corp.
Statement of Cash Flows
Month Ended August 31, 2022
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to cash provided by operations
Net cash provided by operating activities
Cash flows from investing activities:
Acquistion of equipment
Net cash used for investing activities
Cash flows from financing activities:
Issuance (sale) of stock to owners
Payment of dividends
Net cash provided by financing activites
Net increase in cash
Cash balance, August 1, 2022
Cash balance, August 31, 2022
Print
Done
$ (205,700)
25,000
(2,500)
$
$
187,100
1,300
188,400
(205,700)
22,500
5,200
0
5,200
XL
Transcribed Image Text:The owner of Earl Coffee Roasters Corp. seeks your advice as to whether he should cease operations or continue the business. The following financial statements have been prepared as of August 31, 2022.
(Click to view the income statement.) (Click to view the statement of retained earnings.)
F(Click to view the balance sheet.)
(Click to view the statement of cash flows.)
Read the requirement
To: Owner of Earl Coffee Roasters Corp.
Subject: Opinion of net income, dividends, financial position, and cash flows.
Your first month of operations was
These operating results look
The company
your investment.
able to pay a dividend, which should make you very
Your financial position looks
stockholders' equity is
as your
▾. Revenues totaled
Operating activities generated cash of
which is
of cash come from operating activities. You ended the month with cash of
Based on the above facts, I believe you should
and net income was
with such a
return on
Your
as companies prefer to have their largest source
Expert Solution
Step 1
Given in the question:
Service Revenue = $273,200
Net Income = $187,100
Dividends Paid = $2,500
Net Cash Provided by Operating Activities = $188,400
Cash Balance, August 31, 2022 = $5,200
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