Q.5

A sole proprietorship was started on January 1, Year 1, when it received $60,000 cash from Marlin Jones, the owner. During Year 1, the company earned $35,300 in cash revenues and paid $16,200 in cash expenses. Jones withdrew $1,000 cash from the business during Year 1. Required Prepare an income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for Joness Year 1 fiscal year. (Statement of Cash Flows only, amounts to be deducted should be indicated with minus sign.)

Answer is complete and correct. MARLIN JONES SOLE PROPRIETORSHIP Income Statement For the Year Ended December 31, Year 1 Revenues $ 35,300 Expenses (16,200) Net income $ 19,100 Answer is complete and correct. MARLIN JONES SOLE PROPRIETORSHIP Capital Statement For the Year Ended December 31, Year 1 Beginning capital balance 0 Plus: Capital acquired from 60,000 owner Plus: Net income 19.100 Less: Withdrawal by owner (1,000) Ending capital balance $ 78,100 MARLIN JONES SOLE PROPRIETORSHIP Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Equity Total liabilities and equity MARLIN JONES SOLE PROPRIETORSHIP Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities: Net cash flow from operating activities Cash flows from investing activities: Net cash flow from investing activities Cash flows from financing activities: Net cash flow from financing activities Net change in cash Ending cash balance