Example: Complete Financial Statements (for the Year Ended Decem
1. Multi-Step Income Statement
(for the year ended December 31, 2024)
Particulars
Sales Revenue
Less: Sales Returns & Allowances
Net Sales
Beginning Inventory
Purchases
Freight-In
Less: Purchase Returns & Discounts
Goods Available for Sale
Less: Ending Inventory
Cost of Goods Sold (COGS)
Gross Profit
Selling Expenses
Administrative Expenses
Research & Development Expenses
Total Operating Expenses
Operating Income
Other Income (Interest Income, Gain on Sale)
Other Expenses (Interest Expense, Loss)
Income Before Tax
Income Tax Expense
Net Income
2. Single-Step Income Statement
(for the year ended December 31, 2024)
Particulars
Total Revenues (Net Sales + Other Income)
Total Expenses (COGS + OPEX + Other Exp. + Taxes)
Net Income
3. Balance Sheet
(as of December 31, 2024)
Assets
Current Assets
Cash & Cash Equivalents – 1,000,000
Accounts Receivable – 750,000
Inventory – 600,000
Prepaid Expenses – 50,000
Short-term Investments – 200,000
Total Current Assets – 2,600,000
Non-Current Assets
Property, Plant & Equipment (net) – 3,500,000
Intangible Assets (net) – 400,000
Long-term Investments – 300,000
Total Non-Current Assets – 4,200,000
Total Assets – 6,800,000
Liabilities
Current Liabilities
Accounts Payable – 1,200,000
Salaries & Wages Payable – 300,000
Taxes Payable – 250,000
Current Portion of Long-Term Debt – 200,000
Total Current Liabilities – 1,950,000
Non-Current Liabilities
Bonds Payable – 1,200,000
Lease Liabilities – 300,000
Pension Obligations – 0 (if any, can be added)
Total Non-Current Liabilities – 1,500,000
Total Liabilities – 3,450,000
Equity
Share Capital – Common – 2,000,000
Share Premium – 300,000
Retained Earnings – 875,000
Revaluation Surplus / OCI – 175,000
Total Equity – 3,350,000
Total Liabilities & Equity – 6,800,000
4. Statement of Cash Flows – Direct Method
(for the year ended December 31, 2024)
Cash Flows from Operating Activities
Cash received from customers
Cash paid to suppliers & employees
Cash paid for operating expenses
Cash paid for interest
Cash paid for taxes
Net Cash from Operating Activities
Cash Flows from Investing Activities
Purchase of PPE
Proceeds from sale of equipment
Net Cash used in Investing
Cash Flows from Financing Activities
Proceeds from Bonds Payable
Dividends Paid
Net Cash from Financing
NET CASH FLOW
5. Statement of Cash Flows – Indirect Method
Cash Flows from Operating Activities
Net Income
Add: Depreciation Expense
Add: Amortization of Intangibles
Less: Gain on Sale of Equipment
Changes in Working Capital:
Increase in Accounts Receivable
Decrease in Inventory
Increase in Accounts Payable
Increase in Salaries & Tax Payable
Net Cash from Operating Activities
(Investing and Financing same as Direct Method above.)
6. Statement of Changes in Equity
(for the year ended December 31, 2024)
Particulars
Beginning Balance
Net Income
Other Comprehensive Income
Dividends Paid
Ending Balance
✅ Everything ties together:
Net income (₱875,000) flows to Retained Earnings.
Dividends (₱300,000) reduce Retained Earnings.
Ending Cash (₱1,000,000) matches the Balance Sheet.
Total Equity (₱3,350,000) matches Balance Sheet.
Ended December 31, 2024)
Amount (₱)
5,000,000
-200,000
4,800,000
500,000
2,800,000
100,000
-150,000
3,250,000
-600,000
2,650,000
2,150,000 2,150,000
-400,000
-300,000
-100,000
-800,000
1,350,000 1,350,000
150,000
-250,000
1,250,000
-375,000
875,000
Amount (₱)
4,950,000
-4,075,000
875,000
Amount (₱)
4,700,000
-3,200,000
-700,000
-200,000
-350,000
250,000
-500,000
150,000
-350,000
500,000
-300,000
200,000
100,000
Amount (₱)
875,000
250,000
50,000
-100,000
-150,000
50,000
120,000
45,000
250,000
Retained
Share Capital Share Premium Earnings
2,000,000 300,000 300,000
– – 875,000
– – –
– – -300,000
2,000,000 300,000 875,000
Revaluatio
n Surplus Total Equity
100,000 2,700,000
– 875,000
75,000 75,000
– -300,000
175,000 3,350,000