Question

A sole proprietorship was started on January 1, 2018, when it received $66,000 cash from Marlin Jones, the owner. During 2018, the company earned $36,000 in cash revenues and paid $18,570 in cash expenses. Jones withdrew $6,400 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.

Answer 1

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Income Statement:
Revenue		$     36,000
Less: Expense		$ (18,500)
Net Income		$     17,500
Capital Statement:
Beginning Balance		$              -
New Issue		$     66,000
Net Income		$     17,500
Withdrawal		$     (6,400)
Ending Balance		$     77,100
Balance Sheet:
Assets:
Cash	$   77,100
Total Assets		$     77,100
Liabilities		$              -
Equity:
Capital		$     77,100
Total Liabilities and Equity		$     77,100
Cash Flow:
Cash flow from operating activities:
Cash received from customer		$     36,000
Cash paid for expenses		$ (18,500)
Net Cash Flow from opearting activities			$   17,500
Cash flow from Financing activities:			$            -
Cash flow from Investing activities:
Capital Investment		$     66,000
Withdrawal		$     (6,400)
Net Cash Flow from investing activities			$   59,600
Net change in cash			$   77,100
Beginning Balance			$            -
Ending Balance			$   77,100