Question

Snap on damage started business January 1st 2019 after receiving a loan of $10,000 from equity bank. The company also received $10,000 from an investor in return to be paid dividends at the end of the year. The company purchased a piece of land for $ 8000 to serve as a parking space for university students who go to the university across the street. The company incurred $ 2500 expenses during the year to repair the road which leads to the parking lot. The company leased the Parking lot to the university and received $3000 to cover the whole year. At the end of the year they paid dividends of $800 to the investor. REQUIRED: A. INCOME STATEMENT (NET INCOME). B. Cash flow statement C. Retained earnings statement D. Balance sheet

Answer 1

1.)	Income Statement
		Amount $
	Lease Revenue	3,000
	Less: Repair Expense	2,500
	Net Income	500
2.)	Cash Flow Statement
		Amount $
	Cash flow from operating activities
	Net Income	500
	Net Cash flow from operating activities	500
	Cash Flow from Investing Activities
	Purchase of Land	-8,000
	Net Cash Flow from Investing Activities	-8,000
	Cash Flow from Financing Activity
	Loan from Equity bank	10,000
	Amount received from investor	10,000
	Dividend Paid	-800
	Net Cash Flow from Financing Activity	19,200
	Net Increase (decrease) in cash	11,700
	Add: opening cash balance	-
	Ending cash balance	11,700
3.)	Statement of Retained earnings
		Amount $
	Opening Balance	-
	Add: Net income	500
	Less: Dividend	-800
	Ending Balance	-300
4.)	Balance Sheet
		Amount $
	Assets
	Non-Current assets
	Land	8,000
	Current Assets
	Cash	11,700
	Total Assets	19,700
	Liabilities & Stockholder's Equity
	Non-Current liabilities
	Bank Loan	10,000
	Stockholder's Equity
	Investor Capital	10,000
	Retained earnings	-300
	Total Liabilities & Stockholder's Equity	19,700