Poppy's Chicken Shack is applying for a loan. Poppy asks you to conduct a financial statement that reflects the accounting equation. Which statement do you prepare and why?

a) The statement of shareholder's equity, since it will show that Poppy has invested quite a lot of his own money. ,

b) The balance sheet, since it shows a snapshot of the assets, liabilities, and equity of Poppy's Chicken Shack,

c) A statement of cash flows, since it shows that poppy receives external investments to help pay back the loan,

d) The income statement, since it will show that poppy brings in enough revenue to make the loan payments

Correct answer in Bold above?