Chapter 13.A, Problem 7P

To determine

Cash Flow statement: The statement which summarizes the net amount of cash disbursed and received in a particular activity is known as the cash flow statement.

Income Statement: The statement in which the profit or the loss of a company is mentioned is called the income statement. In the income statement particulars such as revenues, expenses, net income and profit or loss are mentioned. It is also a statement which gives us the effect of expenses and profit in a stipulated time period.

Determine the income statement on the cash basis and cash flow statement of Joyner Company. Explain the reason for a sharp decline of the cash.