Q1. Prepare a multi-step Income Statement for both companies in the space provided below.

Q2. Assuming all transactions are cash transactions, prepare a Statement of Cash Flows. Also prepare the Supplement Schedule€”Indirect Method that reconciles net income and net cash from operating activities.

Q3. Prepare a Balance Sheet for both companies in the space provided below.

Q4a. Which company appears to be more profitable? (_________ / Lasco / the same)
b. Which company generated more cash during the year? (Frasco / Lasco / _________)
c. Which company presents a stronger balance sheet? (_________/ Lasco / the same) Why?
Q5. On the Income Statement, why is net income different for Frasco and Lasco?
Q6. On the balance sheet, which accounts report different amounts? (Cash / _________/ _________/ Notes payable / _________) Why?
Q7. On the Statement of Cash Flows, which totals differ between Frasco and Lasco? Net cash from (operating / investing / financing / _________) what conclusions can you draw from this Activity?
Q8. Different accounting methods, such as FIFO or LIFO and SL or DDB, affect (cash- / _________) basis accounting.

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INCOME STATEMENT FRASCO LASCO Sales revenue COGS Operating expenses: Depreciation Other Net income STATEMENT OF CASH FLOWS FRASCO LASCO Net cash from operating activities Cash from customers Cash paid to suppliers Cash paid for operational Total net cash from operating activities expenses Net cash from investing activities Cash paid for equipment Net cash from financing activities Issued long-term debt Net change in cash + Beginning cash - Ending cash Supplemental Schedule -Indirect MethodFRASCO Net Income + Depreciation expense LASCO crease) decrease in inventorv Net cash from operating activities BALANCE SHEET FRASCO LASCO Cash Inventorv Equipment Total assets Long-term debt Retained eamings Total liabilities and stockholders' equity