please complete both attachments
Managers within the firm, as well as the firm’s owners and lenders, keep track of the firm’s performance by reviewing its financial statements – income statement, balance sheet, and statement of cash flows.
· What is the purpose of the income statement? Identify the major types of expenses that are shown on the typical income statement.
· What is the purpose of the balance sheet? Identify the major types of assets and the claims of creditors and owners shown on the typical balance sheet.
· What are the three different accounts that comprise the owners’ equity (also known as stockholders’ equity) section on a typical corporate balance sheet?
· What is a statement of cash flows? Describe the three standard sections contained in a statement of cash flows.
PART 2: Complete both the balance sheet and income statement exercises in the attached Excel file and submit as a file. Note: the file is auto submitted to Turnitin and will result in high score. Please disregard the score.
| You learned about Balance Sheets this week. Fill in the missing items below. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Enter the answers in blue shaded cells | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ASSETS | LIABILITIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash | $10,000 | Accounts payable | $12,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts receivable | 100,000 | Notes payable | 50,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory | Total current liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total current assets | $220,000 | Long-term debt | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross PP&E | 500,000 | Total Liabilities | $190,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Less accumulated depreciation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net PP&E | $375,000 | EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | Common stock ($1 par; 100,000 shares) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paid-in capital | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retained earnings | 150,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total stockholders’ equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reminder: A=L+E |
| You learned about Income Statements this week. Fill in the missing items below. | |
| Sales | |
| COGS | 575,000 |
| Gross profit | $1,600,000 |
| G&A expense | 200,000 |
| Sales & Mkting expense | |
| Depreciation | |
| Operating income | |
| Interest | |
| Income before taxes | |
| Income taxes (30%) | |
| Net income | $700,000 |
| Steps: | |
| 1: Calculate Sales | |
| 2. Calculate Income before taxes. Taxes are 30%, so you know the Net Income (Y) is a percent of “Income before taxes” (X) | |
| 3. Calculate the Income taxes figure | |
| 4. Calculate Operating Income | |
| 5. Calculate Sales & Mkting Exp |
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