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 Income Statement: Profitability of business Balance Sheet: Financial resources and obligations Statement of Owner’s 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 L/No Items Dr Cr 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Cash Accounts receivable Land Building Accumulated Depreciation: Building Office equipment 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 $ 15,490 17,890 130,000 36,000 5,400 2,800 630 7,100 144 150 45 23,814 181,000 10,640 Total $ 215,649

ROBERTS REAL ESTATE COMPANY For the month ended March 30th, 2009 Income Statement ROBERTS REAL ESTATE COMPANY Income Statement For the month ended March 30th, 2009 ______________________________________________________________ Revenue: Sales commission earned………………………………… $ 10640 Less; Expenses: Advertising expense…………………………… $ 630 Salaries expense………………………….......... 7,100 Telephone expense……………………………. 144 Depreciation expense: building……………… 150 Depreciation expense: office equipment.. 45 (8,069) Net Income……………………………………………………………….. $ 2,571* * It is a part of owner’s equity because is to be paid to owner of the business

Income Statement - 1

Income Statement - 2

Statement of Owner’s 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 L/No Items Dr Cr 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Cash Accounts receivable Land Building Accumulated Depreciation: Building Office equipment 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 $ 15,490 17,890 130,000 36,000 5,400 2,800 630 7,100 144 150 45 23,814 181,000 10,640 Total $ 215,649

Capital: James Robert…….... $ 181,000 ROBERT REAL ESTATE COMPANY Statement of Owner’s Equity as on March 30th, 2009 Capital: James Robert…….... $ 181,000 Add: Profit for the period........ 2,571* $ 183,571 Less: Drawings: ……………... 2,800 Net Owner’s Equity…….......... $ 180,771 * Form Income Statement

Owner’s 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 Owner’s Equity

ABC Corporation Adjusted Trial Balance for the month of March 2009 S/No L/No Items Dr Cr 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Cash Accounts receivable Land Building Accumulated Depreciation: Building Office equipment 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 $ 15,490 17,890 130,000 36,000 5,400 2,800 630 7,100 144 150 45 23,814 181,000 10,640 Total $ 215,649

ROBERT REAL ESTATE COMPANY Balance Sheet as on March 30th, 2009 Assets: Cash ………………………………………………………… $ 15,490 Accounts receivable…………………………………..…… 17,890 Land………………………………………………………..…. 130,000 Building…………………………………………. 36,000 Less: Accumulated Depreciation: Building… (150) 35,850 Office equipment…………………………......… 5,400 Less: Accumulated Depreciation: equipment.. (45) 5,355 Total Assets……………………………………………………………. $ 204,585 Liabilities: Accounts Payable…………………………………............... $ 23,814 Owner’s Equity: James Roberts……………………………………………….. $ 180,771 Total Liabilities & Owner’s Equity…………………………….. $ 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