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A sole proprietorship was started on January 1, 2018, when it received $55,500 cash from Marlin Jones, the owner. During 2018, the company earned $43,600 in cash revenues and paid $19,080 in cash expenses. Jones withdrew $6,100 cash from the business during 2018.

Required:
Prepare the income statement. capital statement (statement of changes in equity). balance sheet. and statement of cash flows for Jones's 2018 fiscal year.

Respuesta :

Answer:

a. Net income = $24,520

b. Ending capital = $73,920

c. Total assets = $73,920; and Total Equities and Liabilities = $73,920.

d. Ending cash balance = $73,920.

Explanation:

a. Income statement

Details                         Amount ($)

Revenue                       43,600

Expenses                       19,080

Net income                   24,520

b. Capital statement (statement of changes in equity)

Details                         Amount ($)

Beginning capital           55,500

Net income                     24,520

Withdrawal                     (6,100)

Ending capital                73,920

c. Balance sheet.

Details                         Amount ($)

Assets:          

Cash                               73,920  

Total assets                   73,920

Equity and Liabilities:

Capital                           73,920

Total                               73,920

d. Statement of cash flows

Details                                                         Amount ($)        Amount ($)

Cash from operating activities:  

Cash from revenue                                      43,600

Cash paid for expenses                             (19,080)            

Cash generated from operating activities                              24,520

Cash flow from financing activities:  

Capital introduced                                      55,500

Cash withdrawal                                           (6,100)

Cash generated from financing activities                             49,400

Net cash generated                                                                73,920

Beginning cash balance                                                             0      

Ending cash balance                                                               73,920

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