The Rubble-Flintstone Company Was Started on January 1, Year 1

question 15

Essay

The Rubble-Flintstone Company was started on January 1, Year 1 as a partnership. The initial investments from the two partners were $50,000 from Rubble and $30,000 from Flintstone. During Year 1, Rubble-Flintstone Company earned $70,000 in cash revenue, paid $42,000 in cash expenses and the partners withdrew $5,000 each for their personal use. The partnership agreement calls for equal sharing of net income or loss.Required:
Using only the above information, prepare an income statement, a capital statement, and a balance sheet for the Rubble-Flintstone Company.

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Definitions:

Net Working Capital

The difference between a company's current assets and its current liabilities.

Flexible Policy

A strategy that allows for adaptability and change in response to different situations or conditions.

Restrictive Policy

A financial or operational strategy that limits certain actions to control risk or enhance stability within a company or economy.

Operating Cycle

The operating cycle is the time period it takes for a company to purchase inventory, sell it, and convert the sale into cash.