Financial Statements: financial accounting is the branch of accounting concerned with communicating financial information to outsiders through financial statements.
Financial statements: It consists of four major statements: balance sheet, income statement, statement of
- Balance sheet summarizes assets, liabilities and owners’ equity of a company, used to assess financial position of a company.
- An income statement summarizes the revenue and expenses of a company for a period and used to calculate profit or loss.
- Statement of retained earning shows the portion of earnings retained in the business and
- Statement of cash flows shows how the cash company got cash and where it is used during a period.
To prepare: The correct income statement for December 31 2016.
b.
Financial Statements: financial accounting is the branch of accounting concerned with communicating financial information to outsiders through financial statements.
Financial statements: It consists of four major statements: balance sheet, income statement, statement of retained earnings, and statement of cash flows.
- Balance sheet summarizes assets, liabilities and owners’ equity of a company, used to assess financial position of a company.
- An income statement summarizes the revenue and expenses of a company for a period and used to calculate profit or loss.
- Statement of retained earning shows the portion of earnings retained in the business and
- Statement of cash flows shows how the cash company got cash and where it is used during a period.
To prepare: The correct retained earnings.
c
Financial Statements: financial accounting is the branch of accounting concerned with communicating financial information to outsiders through financial statements.
Financial statements: It consists of four major statements: balance sheet, income statement, statement of retained earnings, and statement of cash flows.
- Balance sheet summarizes assets, liabilities and owners’ equity of a company, used to assess financial position of a company.
- An income statement summarizes the revenue and expenses of a company for a period and used to calculate profit or loss.
- Statement of retained earning shows the portion of earnings retained in the business and
- Statement of cash flows shows how the cash company got cash and where it is used during a period.
To prepare: The balance sheet for the year ended December 31 2016
d.
Financial Statements: financial accounting is the branch of accounting concerned with communicating financial information to outsiders through financial statements.
Financial statements: It consists of four major statements: balance sheet, income statement, statement of retained earnings, and statement of cash flows.
- Balance sheet summarizes assets, liabilities and owners’ equity of a company, used to assess financial position of a company.
- An income statement summarizes the revenue and expenses of a company for a period and used to calculate profit or loss.
- Statement of retained earning shows the portion of earnings retained in the business and
- Statement of cash flows shows how the cash company got cash and where it is used during a period.
To draft: A memo to president explaining difference between the income statements provided and corrected statement.
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Financial Accounting: The Impact on Decision Makers
- Corrected Financial Statements Heidis Bakery Inc. operates a small pastry business. The company has always maintained a complete and accurate set of records. Unfortunately, the companys accountant left in a dispute with the president and took the 2016 financial statements with her. The following balance sheet and income statement were prepared by the companys president: The president is very disappointed with the net loss for the year because net income has averaged $21,000 over the last ten years. He has asked for your help in determining whether the reported net loss accurately reflects the profitability of the company and whether the balance sheet is prepared correctly. Required Prepare a corrected income statement for the year ended December 31, 2016. Prepare a statement of retained earnings for the year ended December 31, 2016. (The actual amount of retained earnings on January 1, 2016, was $39,900. The December 31, 2016, Retained Earnings balance shown is incorrect. The president simply plugged in this amount to make the balance sheet balance.) Prepare a corrected balance sheet at December 31, 2016. Draft a memo to the president explaining the major differences between the income statement he prepared and the one you prepared.arrow_forwardPlease see below. The information is given. The picture includes what I need help with answering. Wolford Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company’s fiscal year on November 30, 2017, these accounts appeared in its adjusted trial balance. Accounts Payable $ 30,016 Accounts Receivable 19,264 Accumulated Depreciation—Equipment 76,160 Cash 8,960 Common Stock 39,200 Cost of Goods Sold 688,016 Freight-Out 6,944 Equipment 175,840 Depreciation Expense 15,120 Dividends 13,440 Gain on Disposal of Plant Assets 2,240 Income Tax Expense 11,200 Insurance Expense 10,080 Interest Expense 5,600 Inventory 29,344 Notes Payable 48,720 Prepaid Insurance 6,720 Advertising Expense 37,520 Rent Expense 38,080 Retained Earnings 15,904 Salaries and…arrow_forward(Error Analysis and Correcting Entry) You have been engaged to review the financial statements of Gottschalk Corporation. In the course of your examination, you conclude that the bookkeeper hired during the current year is not doing a good job. You notice a number of irregularities as follows.1. Year-end wages payable of $3,400 were not recorded because the bookkeeper thought that “they were immaterial.”2. Accrued vacation pay for the year of $31,100 was not recorded because the bookkeeper “never heard that you had to do it.”3. Insurance for a 12-month period purchased on November 1 of this year was charged to insurance expense in the amount of $2,640 because “the amount of the check is about the same every year.”4. Reported sales revenue for the year is $2,120,000. This includes all sales taxes collected for the year. The sales tax rate is 6%. Because the sales tax is forwarded to the state’s Department of Revenue, the Sales Tax Expense account is debited. The bookkeeper thought that…arrow_forward
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