Chapter 1, Problem 3APSA

To determine

Financial Statements:

• Financial statements are financial records of the entities transactions for a given reporting period and indicate the financial health of an entity. They comprise of:

1. Income Statements and Notes to Income Statement,
2. Balance Sheets and,
3. Cash flow statements.

• Income Statements and Notes to Income Statement record the results of the company’s operations during a particular reporting period and provide information about the sources of funds and expenses of an entity.

• Balance Sheet is a list of the closing balance of assets and liabilities of an entity as on a particular date and it is used for analysis of the financial health of the entity. Assets are resources that increase revenue directly or indirectly for the business and liabilities are monetary obligations to be fulfilled by the entity.

To Prepare:

Balance Sheet as of December 31, 2015.