Evan OBrien publishes a travel magazine. In need of cash, the business applies for a loan with

Question:

Evan O’Brien publishes a travel magazine. In need of cash, the business applies for a loan with National Bank. The bank requires borrowers to submit financial statements. With little knowledge of accounting, Evan O’Brien, a stockholder, does not know how to proceed.

Requirements

1. What are the four financial statements that the business will need to prepare?

2. Is there a specific order in which the financial statements must be prepared?

3. Explain how to prepare each statement.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...