Chapter 1, Problem 1.5EYCT

(a)

To determine

Financial Statements

Financial Statements are a set of statement consisting of an Income Statement and Balance Sheet prepared to know the financial position of the organization.

Income Statement

Income Statement is prepared by all the companies by enumerating all the expenses and revenues in the statement to calculate the resulting difference of Net Profit or Net Loss.

Retained Earnings Statement

Retained Earnings Statement is the statement showing the balance of retained earnings left at the end of the period after including the net profit for the period and distributing the dividend to the shareholders.

Balance Sheet

A Balance Sheet is a statement showing the position of the assets, liabilities and the owner’s equity at the end of the financial year.

Basis of loss concluded of $6,100.

(b)

To determine

Basis of net income concluded of $2,450.

(c)

To determine

To Determine: Actual net income of March.

(d)

To determine

To Determine: Revenue recognized in March.