Chapter 6 Peachtree

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Exercise 7-1: Answer the following questions about the balance sheet and income statement. 1. The total assets are $499,890.96 2. The total Capital is $319,102.64 3. Indicate the amount of the net income or (net loss) for the month of March. ($3,037.39) 4. The current month’s gross profit is $64,839.74 5. The current month’s total expenses are $67,877.13 An asset is an item of value to a company. Assets may be tangible physical items or intangible items with no physical form. Assets add value to a company, and they are important to a company’s continued success. The total capital shows the investors just how much common stock there is and just how much capital is paid. However, it also shows how much the company holds back in the retained earnings. This is just one of many statements that investors will look at when looking into a company whether it is because they want to invest or are shareholders. Information from the income statement shows the users the activity of the company. The gross profits and the expenses are also important because of the profit. Expenses give the net income or (net loss) for the accounting period in question. These are important to the investors who are looking at the company but also to managers. Exercise 7-2: Answer the following questions about the statement of cash flow and the statement of retained earnings. 1. The current month’s net cash provided by operations is $34,936.57 2. The year-to-date’s net cash provided by operations is $4,717.37 3. The cash balance at the end of period for the current month is $32,060.92 4. The beginning Retained Earnings balance is $189,037.60 5. The ending Retained Earnings balance is $214,102.64 The statement of cash flows information is important to users because what it shows is where the cash came from, what the cash is used for and the overall changes within the cash for the accounting

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