Financial Statements

Part 1:

Managers within the firm, as well as the firms owners and lenders, keep track of the firms performance by reviewing its financial statements:

• income statement
• balance sheet
• statement of cash flow

In 675-700 words (not including title page or references) and in an APA7 formatted paper with an Introduction and Conclusion, explain the following questions. Do not include the questions verbatim in your responses or as headings. Use the template provided.

• What is the purpose of the income statement? Identify and describe the major types of expenses that are shown on the typical income statement.
• What is the purpose of the balance sheet? Identify and describe the major types of assets and the claims of creditors and owners shown on the typical balance sheet.
• What are the three different accounts that comprise the owners equity (also known as stockholders’ equity) section on a typical corporate balance sheet? Describe each account.
• What is a statement of cash flows? Describe the three standard sections contained in a statement of cash flows.

PART 2:

Complete both the balance sheet and income statement exercise tabs in this Excel file and submit it as a file.

• An Excel file with two tabs for the completed statements
• balance sheet
• income statement
• Complete both the balance sheet and income statement exercises in the attached Excel file and submit as a file.