Statement of Earnings, Statement of Retained Earnings, and Statement of Financial Position McDonald Marina provides docking and cleaning services for pleasure boats at its marina in Vancouver. The following account balances are available for 2022: Accounts payable $ 26,400 Accounts receivable 268,700 Accumulated depreciation (building) 64,500 Accumulated depreciation (equipment) 950,400 Bonds payable (due 2027) 2,000,000 Building 197,300 Cash 36,620 Common shares (40,000 shares) 614,320 Depreciation expense (building) 21,500 Depreciation expense (equipment) 246,300 Dividends 25,300 Equipment 2,490,000 Income tax expense 21,700 Interest expense 236,000 Interest payable 18,000 Land 875,000 Rent expense 14,600 Rent payable 2,400 Retained earnings, 12/31/2021 128,600 Service revenue (cleaning) 472,300 Service revenue (docking) 1,460,000 Supplies 9,800 Supplies expense 89,100 Utilities expense 239,400 Wages expense 987,200 Wages payable 21,600 Prepare a statement of retained earnings for McDonald Marina for the year ended December 31, 2022. McDonald MarinaStatement of Retained EarningsFor the Year Ended December 31, 2022 $- Select - - Select - - Select - $- Select - Prepare a classified statement of financial position for McDonald Marina for the year ended December 31, 2022. McDonald MarinaStatement of Financial PositionDecember 31, 2022 Assets Current assets: $- Select - - Select - - Select - Total current assets $fill in the blank a9bf14f9401afab_7 Property, plant, and equipment: $- Select - $- Select - - Select - - Select - $- Select - - Select - - Select - Total property, plant, and equipment fill in the blank a9bf14f9401afab_20 Total assets $fill in the blank a9bf14f9401afab_21 Liabilities Current Liabilities $- Select - - Select - - Select - - Select - Total current liabilities $fill in the blank a9bf14f9401afab_30 Long-term liabilities: - Select - Total liabilities $fill in the blank a9bf14f9401afab_33 Shareholders' Equity Shareholders' equity: $- Select - - Select - Total shareholders' equity fill in the blank a9bf14f9401afab_38 Total liabilities and shareholders' equity $fill in the blank a9bf14f9401afab_39 2. CONCEPTUAL CONNECTION: How would a multiple-step statement of earnings be different from the single-step statement of earnings you prepared for McDonald Marina? A single-step statement of earnings and a multiple-step statement of earnings report amount for net income. However, a statement of earnings only contains two categories. These two categories are subtracted to arrive at net income. Therefore, between the two formats is
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Statement of Earnings, Statement of
McDonald Marina provides docking and cleaning services for pleasure boats at its marina in Vancouver. The following account balances are available for 2022:
| Accounts payable | $ 26,400 | |
| Accounts receivable | 268,700 | |
| 64,500 | ||
| Accumulated depreciation (equipment) | 950,400 | |
| Bonds payable (due 2027) | 2,000,000 | |
| Building | 197,300 | |
| Cash | 36,620 | |
| Common shares (40,000 shares) | 614,320 | |
| Depreciation expense (building) | 21,500 | |
| Depreciation expense (equipment) | 246,300 | |
| Dividends | 25,300 | |
| Equipment | 2,490,000 | |
| Income tax expense | 21,700 | |
| Interest expense | 236,000 | |
| Interest payable | 18,000 | |
| Land | 875,000 | |
| Rent expense | 14,600 | |
| Rent payable | 2,400 | |
| Retained earnings, 12/31/2021 | 128,600 | |
| Service revenue (cleaning) | 472,300 | |
| Service revenue (docking) | 1,460,000 | |
| Supplies | 9,800 | |
| Supplies expense | 89,100 | |
| Utilities expense | 239,400 | |
| Wages expense | 987,200 | |
| Wages payable | 21,600 |
Prepare a statement of retained earnings for McDonald Marina for the year ended December 31, 2022.
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Prepare a classified statement of financial position for McDonald Marina for the year ended December 31, 2022.
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| Total current assets | $fill in the blank a9bf14f9401afab_7 | ||
| Property, plant, and equipment: | |||
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| Total property, plant, and equipment | fill in the blank a9bf14f9401afab_20 | ||
| Total assets | $fill in the blank a9bf14f9401afab_21 | ||
| Liabilities | |||
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| Total current liabilities | $fill in the blank a9bf14f9401afab_30 | ||
| Long-term liabilities: | |||
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| Total liabilities | $fill in the blank a9bf14f9401afab_33 | ||
| Shareholders' Equity | |||
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| Total shareholders' equity | fill in the blank a9bf14f9401afab_38 | ||
| Total liabilities and shareholders' equity | $fill in the blank a9bf14f9401afab_39 |
2. CONCEPTUAL CONNECTION: How would a multiple-step statement of earnings be different from the single-step statement of earnings you prepared for McDonald Marina?
A single-step statement of earnings and a multiple-step statement of earnings report
amount for net income. However, a
statement of earnings only contains two categories. These two categories are subtracted to arrive at net income. Therefore,
between the two formats is
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