Financial Statements

A set of Financial Statements consist of four related

accounting reports that summarizes the financial
resources, obligations, profitability and cash
transaction of a business in the few pages
1.
2.
3.
4.

Income Statement: Profitability of business

Balance Sheet: Financial resources and obligations
Statement of Owners Equity: Obligation of business
to Owner
Statement of Cash Flow: Cash Transaction of a
Business.

Income Statement
A statement that shows the profit or loss of the
business for a specific time period. This
statement consisting;
Revenue for the accounting period
Expenses for the accounting period

ABC Corporation
Adjusted Trial Balance
for the month of March 2009
S/No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

L/No

Items
Cash
Accounts receivable
Land
Building

Dr
$ 15,490
17,890
130,000
36,000

Accumulated Depreciation: Building

Office equipment

150
5,400

Accumulated Depreciation: equipment

Accounts payable
Capital: James Roberts
Drawings: James Roberts
Sales Commission earned
Advertising expenses
Salaries expenses
Telephone expenses
Depreciation expense: building
Depreciation expense: equipment
Total

Cr

45
23,814
181,000
2,800
10,640
630
7,100
144
150
45
$ 215,649

$ 215,649

Income Statement
ROBERTS REAL ESTATE COMPANY
Income Statement
For the month ended March 30th, 2009

______________________________________________________________
Revenue:
Sales commission earned
Less; Expenses:
Advertising expense
Salaries expense..........
Telephone expense.
Depreciation expense: building
Depreciation expense: office equipment..

$ 630
7,100
144
150
45

Net Income..

* It is a part of owners equity because is to be paid to owner of the business

$ 10640

(8,069)
$ 2,571*

Income Statement - 1

Income Statement - 2

Statement of Owners Equity

This statement shows the obligation of business
to its owner. This statement consisting ;
Capital invested by owner
Profit of the current accounting period
Drawings of the owner

ABC Corporation
Adjusted Trial Balance
for the month of March 2009
S/No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

L/No

Items
Cash
Accounts receivable
Land
Building

Dr
$ 15,490
17,890
130,000
36,000

Accumulated Depreciation: Building

Office equipment

150
5,400

Accumulated Depreciation: equipment

Accounts payable
Capital: James Roberts
Drawings: James Roberts
Sales Commission earned
Advertising expenses
Salaries expenses
Telephone expenses
Depreciation expense: building
Depreciation expense: equipment
Total

Cr

45
23,814
181,000
2,800
10,640
630
7,100
144
150
45
$ 215,649

$ 215,649

ROBERT REAL ESTATE COMPANY

Statement of Owners Equity
as on March 30th, 2009

Capital: James Robert....

Add: Profit for the period........
Less: Drawings: ...

$ 181,000
2,571*
$ 183,571
2,800

Net Owners Equity..........

$ 180,771

* Form Income Statement

Owners Equity Statement

Balance Sheet
That statement which shows the financial position of the
business on a particular time is called Balance Sheet.
This statement shows the resources of the business as
well as the obligation of the business.

Balance sheet consisting;

Assets of the business
Liabilities of the business
Owners Equity

ABC Corporation
Adjusted Trial Balance
for the month of March 2009
S/No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

L/No

Items
Cash
Accounts receivable
Land
Building

Dr
$ 15,490
17,890
130,000
36,000

Accumulated Depreciation: Building

Office equipment

150
5,400

Accumulated Depreciation: equipment

Accounts payable
Capital: James Roberts
Drawings: James Roberts
Sales Commission earned
Advertising expenses
Salaries expenses
Telephone expenses
Depreciation expense: building
Depreciation expense: equipment
Total

Cr

45
23,814
181,000
2,800
10,640
630
7,100
144
150
45
$ 215,649

$ 215,649

ROBERT REAL ESTATE COMPANY

Balance Sheet
as on March 30th, 2009
Assets:
Cash
Accounts receivable..
Land...
Building.
Less: Accumulated Depreciation: Building

$ 15,490
17,890
130,000
36,000
(150)

Office equipment......
5,400
Less: Accumulated Depreciation: equipment..
(45)
Total Assets.
Liabilities:
Accounts Payable...............
Owners Equity:
James Roberts..
Total Liabilities & Owners Equity..

35,850

5,355
$ 204,585

$ 23,814
$ 180,771
$ 204,585

Balance Sheet - 1

Balance Sheet - 2

Cash Flow Statement

A statement that shows the flow of cash during an
accounting period. That how much cash comes in to the
business and from which sources? And how much cash
goes out from the business and for what purposes?
Cash Flow Statement containing three type of activies:

Cash flow from operating activities

Cash flow from investing activities
Cash flow from financing activities

Cash Flow Statement - 1