Financial statements tell a story about an organization. The four primary financial statements used in accounting are the balance sheet, income statement, cash flow statement, and statement of retained earnings. Click the links to review the financial statements for one of Red Apple Clinic, Inc.s competitors, Natures Remedy, Inc.

1. Identify the main components of each statement and the time frame in which each statement reports information. How is the information on the Balance Sheet classified? (8 points)

2. Assume that you are in a management role for a health care organization. Select one of the four financial statements and discuss how you might use this statement to make business decisions. (6 points)

3. The two accounting methods used in the profession are the accrual basis of accounting and the cash basis of accounting. Explain the difference between these two methods. (4 points)

4. Explain the importance of recording and reporting financial information to external and internal users. (4 points)

Nature's Remedy, Inc Balance Sheet As of December 31, 20xx ASSETS Current Assets Cash Petty Cash Accounts Receivable Net Inventory 580.000 500 15.000 35,000 $130.500 Total Current Assets Long Term Assets - net of depreciation Equipment net of depreciation $75,000 20.000 Total Long Term Assets $95,000 Total Assets $225,500 LIABILITIES Current Liabilities Accounts Payable Wages Payable S5,300 25,000 $30,300 Total Current Liabilities Long-Term Liabilities $55,000 Total Long-term Liabilities 55.000 $85,300 Notes Payable Total Liabilities Stockholders Equity Common Stock Retained Earnings $83.000 57.200 Total Stockholders Equity $140,200 Total Liabilities and Stockholder's Equity $225,500 Nature's Remedy, Inc Balance Sheet As of December 31, 20xx ASSETS Current Assets Cash Petty Cash Accounts Receivable Net Inventory 580.000 500 15.000 35,000 $130.500 Total Current Assets Long Term Assets - net of depreciation Equipment net of depreciation $75,000 20.000 Total Long Term Assets $95,000 Total Assets $225,500 LIABILITIES Current Liabilities Accounts Payable Wages Payable S5,300 25,000 $30,300 Total Current Liabilities Long-Term Liabilities $55,000 Total Long-term Liabilities 55.000 $85,300 Notes Payable Total Liabilities Stockholders Equity Common Stock Retained Earnings $83.000 57.200 Total Stockholders Equity $140,200 Total Liabilities and Stockholder's Equity $225,500