Any use of AI will receive a automatic 0-There are 2 Parts to this Assignment. Use the templates provided.
Prompt:
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
- statement of cash flows
PART 1:
In 675-700 words (not including title page or references) and in an APA7 formatted with an Introduction and Conclusion, explain the following questions. Do not include the questions verbatim in your responses or as headings. Use the template provided.
- What is the purpose of the income statement? Identify and describe the major types of expenses that are shown on the typical income statement.
- What is the purpose of the balance sheet? Identify and describe 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? Describe each account.
- 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 exercise tabs in this Excel file and submit it as a file. Note: the file is auto-submitted to Turnitin and will result in a high score. Please disregard the score.
TIP: This entire excel exercise is add, multiply, or subtract. Look at it as a math puzzle.
Balance Sheet
| 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 |
Income Statement
| You learned about Income Statements this week. Fill in the missing items below. | |||||
| Enter the answers in blue shaded cells | |||||
| Sales | |||||
| COGS | 575,000 | ||||
| Gross profit | $1,600,000 | ||||
| G&A expense | 200,000 | ||||
| Sales & Mkting expense | TIP: first determine Income before taxes and operating income | ||||
| Depreciation | 50,000 | Find the difference between Gross Profit and Operating Income. | |||
| Operating income | |||||
| Interest | 100,000 | ||||
| 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 |