Description
Wk1: 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.
There are 2 Parts.
PART 1: In a 600-700 words paper (not including title page or references), respond to the following:
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.
APA7 and Turnitin are required. Include a minimum of 2 references. In the Assignment dropbox, please attach your paper as a file, do not copy & paste.
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.
Unformatted Attachment Preview
You learned about Balance Sheets this week. Fill in the missing items
below.
Enter the answers in blue shaded cells
ASSETS
Cash
Accounts receivable
Inventory
Total current assets
Gross PP&E
Less accumulated depreciation
Net PP&E
Total Assets
Reminder: A=L+E
$10,000
100,000
$220,000
500,000
$375,000
LIABILITIES
Accounts payable
Notes payable
Total current liabilities
Long-term debt
Total Liabilities
$12,000
50,000
$190,000
EQUITY
Common stock ($1 par; 100,000 shares)
Paid-in capital
Retained earnings
Total stockholders’ equity
Total Liabilities and Equity
150,000
You learned about Income Statements this week. Fill in the missing items below.
Enter the answers in blue shaded cells
Sales
COGS
Gross profit
G&A expense
Sales & Mkting expense
Depreciation
Operating income
Interest
Income before taxes
Income taxes (30%)
Net income
575,000
$1,600,000
200,000
50,000
100,000
$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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