The Assets and Liabilities of Rocky's Day Spa at December

question 151

Essay

The assets and liabilities of Rocky's Day Spa at December 31 and expenses for the year are listed below. The stockholders' equity was $68,000 ($48,000 in Common Stock and $20,000 in Retained Earnings) at January 1. The shareholders invested in an additional $10,000 of common stock during the year. Net income for the year is $45,625. Prepare an income statement for Rocky's Day Spa for the current year ended December 31.

---

Definitions:

Statement of Cash Flows

A statement that outlines the influence of balance sheet and income modifications on the status of cash and cash equivalents, divided by the categories of operational, investment, and financial activities.

Financing Section

Part of the cash flow statement that shows cash flows related to borrowing, repaying debts, and equity transactions.

Common Stock

A type of ownership in a corporation that entitles holders to vote on corporate matters and receive dividends.

Cash Increase

The rise in the amount of cash and cash equivalents that a company has during a particular period, often resulting from operational activities, financing, or investments.