19 20 21 MARTA COMMUNICATIONS, INC. Statement of Retained Earnings For the Month Ended March 31, 20X1 22 23 Retained Earnings, March 1, 20X1 24 Add: Net income 25 Subtract: Dividends 26 Retained Earnings, March 31, 20X1 27 28 29 30 31 32 Assets 33 Cash 34 35 Office supplies 36 Land 37 Total Assets 38 39 40 41 Accounts receivable Sheet1 $0 (500) MARTA COMMUNICATIONS, INC. Balance Sheet At March 31, 20X1 Liabilities $3,400 2,300 12,000 Retained earnings Accounts payable Stockholders' Equity Common stock Total Liabilities and Stockholders' Equity $6,800 14,000 DI
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![**Incomplete Financial Statements for Marta Communications, Inc.**
**Required:**
Solve for the missing amounts. *Note:* When an amount on one financial statement is again shown on another statement, you must reference the cell from the earlier statement rather than calculate the amount, thus indicating the relationship between the two statements.
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**MARTA COMMUNICATIONS, INC.**
**Income Statement**
*For the Month Ended March 31, 20X1*
- **Sales Revenues:** $34,500
**Expenses:**
- **Rent Expense:** $2,600
- **Wages Expense:** [Blank]
- **Utilities Expense:** $4,800
- **Income Tax Expense:** $800
- **Net Income:** $4,100
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In this document, you are tasked with finding the missing amounts using the information provided and understanding the relationships between financial statements. Note that the 'Wages Expense' value is missing and needs to be calculated.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffda4760b-60b1-430e-9684-85e29d908d85%2F08114884-25ec-433e-90c0-7536c6cb8da4%2Flzbwz1f_processed.png&w=3840&q=75)
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