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Hard Work Financial Statements Summary

The document contains sample financial statements including an income statement, owner's equity statement, and balance sheet for a business called Hard Work. It shows a net loss for the period on the income statement and calculations for cost of goods sold and expenses. The owner's equity statement tracks the owner's investment and drawings. The balance sheet presents assets, liabilities, and owner's equity with cash, accounts receivable, inventory, and accounts payable listed.

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edensam951
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9 views2 pages

Hard Work Financial Statements Summary

The document contains sample financial statements including an income statement, owner's equity statement, and balance sheet for a business called Hard Work. It shows a net loss for the period on the income statement and calculations for cost of goods sold and expenses. The owner's equity statement tracks the owner's investment and drawings. The balance sheet presents assets, liabilities, and owner's equity with cash, accounts receivable, inventory, and accounts payable listed.

Uploaded by

edensam951
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

a.

Income Statement

Hard Work
Income Statement
For the Period Ended [Date]

Sales Revenue $14,536


Less: Cost of Goods Sold
Beginning Inventory $7,000
Add: Purchases $5,818
Less: Ending Inventory $10,000 (1,818)
Cost of Goods Sold $12,718
Gross Profit $ 1,818
Less: Operating Expenses
Selling Expenses $2,650
Administrative Expenses $1,150 (3,800)
Net Loss ($ 1,982)

Explanation:

 Cost of Goods Sold (COGS): We use the perpetual inventory method (implicit in the ending inventory information) to calculate
COGS: Beginning Inventory + Purchases - Ending Inventory.
 Net Loss: Revenue is insufficient to cover expenses during the period.

b. Owner's Equity Statement

Hard Work
Owner's Equity Statement
For the Period Ended [Date]

Alex Capital, Beginning $25,000


Add: Net Loss (from Income Statement) ($1,982)
Alex Capital, Ending $23,018
Less: Alex Drawings $ 200
Net Investment in Business $22,818

Explanation:

 The owner's capital account (Alex Capital) reflects the owner's investment and any net income or loss from the business.
 Net Investment in Business represents the owner's current financial stake in the company.

c. Balance Sheet

Hard Work
Balance Sheet
As of [Date]

Assets
Current Assets
Cash $19,663
Accounts Receivable $1,880
Merchandise Inventory $10,000
Total Current Assets $31,543

Total Assets $31,543


Liabilities & Owner's Equity
Current Liabilities
Accounts Payable $ 700
Total Liabilities $ 700

Owner's Equity
Alex Capital $22,818
Total Owner's Equity $22,818

Total Liabilities & Owner's Equity $31,543

Explanation:

 The balance sheet equation (Assets = Liabilities + Owner's Equity) holds true.
 Ending inventory is reflected in the balance sheet.

Assumptions and Considerations:

 The date for the financial statements is not provided, so I've used "[Date]" as a placeholder.
 No information is given about income taxes, so they are not included.
 The trial balance is assumed to be unadjusted, and no adjustments are necessary based on the limited information.

I hope this comprehensive response provides a clear and accurate picture of Hard Work's financial performance and position.

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