Susan’s Lawn Service Phone 471-4487 Susan’s Lawn Service Presented By: Leo, Ashley, Sungtae, David, Tony
BRIEF Susan set up a company in June, specializing in lawn services. To buy the utilities, she borrowed $2,500 cash by signing a note payable promising to pay the $2,500 plus interest of $75 at the end of 3 months. At the end of August, her bank deposits of collections from customers totaled $12,600. We are going to prepare a quarterly income statement for this company for these 3 months.
Question: Do you see a need for one or more additional financial reports for this company for 2006 and thereafter? Explain.
Answer: Yes. Susan needs an additional financial report for her company, such as balance sheet. By taking consideration of assets and liabilities, Susan is able to get a better idea of the financial position of her company. She might also needs a statement of cash flows, which only deals with inflows and outflows of cash, and leads a straight view of her account.