Chapter 1, Problem E1.30E

Preparing the financial statements

Learning Objective 5

Estella Osage publishes an online travel magazine. In need of cash, the business applies for a loan with National Bank. The bank requires borrowers to submit financial statements. With little knowledge of accounting, Estella Osage, the owner, does not know how to proceed.

Requirements

1.What are the four financial statements that the business will need to prepare?

2. Is there a specific order in which the financial statements must be prepared?

3. Explain how to prepare each statement.

Use the following information to answer Exercises E1-31through E1-33.The account balances of Wilson Towing Service at June 30, 2018, follow:

Equipment	$25,850	Service Revenue	$15,000
Office Supplies	1,000	Accounts Receivable	9,000
Notes Payable	6,800	Accounts Payable	8,000
Rent Expense	900	Wilson, Capital. June 1, 2018	3,250
Cash	1,400	Salaries Expense	2,400
Wilson, Withdrawals	3,500