A sole proprietorship was started on January 1, 2016, when it received $47,500 c
ID: 2394087 • Letter: A
Question
A sole proprietorship was started on January 1, 2016, when it received $47,500 cash from Marlin Jones, the owner. During 2016, the company earned $40,900 in cash revenues and paid $21,070 in cash expenses. Jones withdrew $5,100 cash from the business during 2016, Required Prepare an income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for Jone's 2016 fiscal year. (Statement of Cash Flows only, items to be deducted must be indicated with a negative amount.) MARLIN JONES SOLE PROPRIETORSHIP Income Statement For the Year Ended December 31, 2016 Revenues $ 40,900 Expenses (21,070) Net income $ 19,830 MARLIN JONES SOLE PROPRIETORSHIP Capital Statement For the Year Ended December 31, 2016 Beginning capital balance $ 0 Plus: Capital acquired from owner? 47,500 Plus: Net income 19,830 Less: Withdrawal by owner 5,100 Ending capital balance $ 62,230Explanation / Answer
Solution:
Income statement and capital statement is correct , so I am providing answer to last two parts that is Balance sheet and Statement of cash flows.
Balance Sheet for Jone’s 2016 Fiscal Year
MARLIN JONES SOLE PROPRIETORSHIP
Balance Sheet
As of December 31,2016
Assets
Cash *
$ 62,230
Total Assets
$ 62,230
Liabilities
$ 0
Equity
Jones, Capital (Ending Balance)**
$ 62,230
Total Liabilities and Equity
$ 62,230
*Cash Balance= Capital introduced + Cash Revenue – Cash Expenses – Cash withdrawal
= $ 47,500 + $ 40,900 - $ 21,070- $ 5,100
= $ 62,230
**Jones, Capital (Ending Balance)
= Capital invested + Net Income – Cash Withdrawal
=$ 47,500 + ($ 40,900 - $ 21,070) -$ 5,100
=$ 47,500 + $ 19,830 - $ 5,100
= $ 62,230
Solution: Statement of Cash Flows for Jone’s 2016 Fiscal Year
MARLIN JONES SOLE PROPRIETORSHIP
Statement of Cash Flows
As of December 31,2016
Cash flows from operating activities:
Receipts from Revenues
$ 40,900
Paid for expenses
($ 21,070)
Net Cash flows from operating activities
$ 19,830
Cash flows from investing activities:
No transaction
0
Net Cash flows from investing activities
$ 0
Cash flows from financing activities:
Proceeds from Owner
$ 47,500
Paid for Owner Withdrawals
($ 5,100)
Net Cash flows from financing activities
$ 42,400
Net Change in Cash ($ 19,830 + $ 42,400)
$ 62,230
Plus: Beginning Cash Balance
0
Ending Cash Balance
$ 62,230
MARLIN JONES SOLE PROPRIETORSHIP
Balance Sheet
As of December 31,2016
Assets
Cash *
$ 62,230
Total Assets
$ 62,230
Liabilities
$ 0
Equity
Jones, Capital (Ending Balance)**
$ 62,230
Total Liabilities and Equity
$ 62,230
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