The company Computadoras Caribe, after making the adjustments in the month of March, has the following balances in the books, which are found in the following adjusted trial balance:
1- Make the statement of income and expenses of multiple stages (multi-step income statement).
2- Make the statement of capital (statement of owner’s equity).
3- Make the status of situation (balance sheet).
Computadoras Caribe
Adjusted Trial Balance
Period ending March 31, 2020
| Account title | Ref. | Debit | Credit |
| Cash | $17,560 | ||
| Account Receivable | 18,065 | ||
| Supplies | 60,500 | ||
| Building | 180,000 | ||
| Acc. Depreciation-Building | $22,000 | ||
| Equipment | 45,600 | ||
| Acc. Depreciation-Equipment | 5,800 | ||
| Account Payable | 29,200 | ||
| Salary Payable | 3,500 | ||
| Interest Payable | 1,000 | ||
| Unearned Sales Revenue | 7,000 | ||
| Note Payable, Long Term | 85,000 | ||
| J. Ayala, Capital | 180,000 | ||
| J. Ayala, Withdrawals | 5,000 | ||
| Sales Revenue | 150,000 | ||
| Sales Discounts | 6,200 | ||
| Sales Return and Allowances | 7,600 | ||
| Cost of Goods Sold | 102,000 | ||
| Selling Expense | 18,400 | ||
| General Expense | 20,075 | ||
| Interest Expense | 2,500 | ||
| Total | 483,500 | 483,500 |
In this essay, we will prepare the financial statements for Computadoras Caribe as of March 31, 2020. These financial statements include the Multi-Step Income Statement, the Statement of Owner’s Equity, and the Balance Sheet.
The Multi-Step Income Statement is a comprehensive report that provides a detailed breakdown of a company’s revenues, expenses, and ultimately, its net income. Computadoras Caribe’s income statement for March 2020 is as follows:
| Debit ($) | Credit ($) | ||
|---|---|---|---|
| Sales Revenue | 150,000 | ||
| Sales Discounts | 6,200 | ||
| Sales Returns and Allowances | 7,600 | ||
| Cost of Goods Sold | 102,000 | ||
| Selling Expense | 18,400 | ||
| General Expense | 20,075 | ||
| Interest Expense | 2,500 | ||
| ———– | ———— | ||
| Total Revenue and Gains | 150,000 | ||
| Total Expenses | 156,775 | ||
| Net Income | -6,775 |
The Multi-Step Income Statement demonstrates that Computadoras Caribe incurred more expenses than it generated in revenue, resulting in a net loss of -$6,775 for the period ending March 31, 2020.
2. Statement of Owner’s Equity:
The Statement of Owner’s Equity outlines changes in the owner’s equity during the accounting period. It considers the owner’s capital, withdrawals, and the net income or loss. For Computadoras Caribe, this statement for March 31, 2020, looks like this:
| Debit ($) | Credit ($) | ||
|---|---|---|---|
| J. Ayala, Capital | 180,000 | ||
| J. Ayala, Withdrawals | 5,000 | ||
| Net Income | 6,775 | ||
| ———– | ———— | ||
| Total Equity at the Beginning | 180,000 | ||
| Total Equity at the End | 180,000 |
The Statement of Owner’s Equity shows that J. Ayala’s capital remained constant at $180,000 from the beginning to the end of the accounting period.
Balance Sheet
The Balance Sheet is a snapshot of a company’s financial position at a specific point in time. It provides a summary of assets, liabilities, and owner’s equity. Computadoras Caribe’s Balance Sheet as of March 31, 2020, is presented below:
Assets:
| Debit ($) | Credit ($) | ||
|---|---|---|---|
| Cash | 17,560 | ||
| Accounts Receivable | 18,065 | ||
| Supplies | 60,500 | ||
| Building | 180,000 | ||
| Accumulated Depreciation – Building | 22,000 | ||
| Equipment | 45,600 | ||
| Accumulated Depreciation – Equipment | 5,800 | ||
| Total Assets | 284,825 |
Liabilities
| Debit ($) | Credit ($) | ||
|---|---|---|---|
| Accounts Payable | 29,200 | ||
| Salary Payable | 3,500 | ||
| Interest Payable | 1,000 | ||
| Unearned Sales Revenue | 7,000 | ||
| Note Payable, Long Term | 85,000 | ||
| Total Liabilities | 29,200 | 116,700 |
Owner’s Equity
| Debit ($) | Credit ($) | ||
|---|---|---|---|
| J. Ayala, Capital | 180,000 | ||
| Total Owner’s Equity | 180,000 |
The Balance Sheet reflects the company’s total assets of $284,825, total liabilities of $116,700, and owner’s equity of $180,000, providing a clear financial snapshot of Computadoras Caribe’s position as of March 31, 2020.
In conclusion, these financial statements enable stakeholders to assess Computadoras Caribe’s financial performance, equity changes, and overall financial health at the end of March 2020. The Multi-Step Income Statement indicates a net loss, the Statement of Owner’s Equity shows stability in owner’s capital, and the Balance Sheet provides a comprehensive view of assets, liabilities, and equity. These statements are crucial tools for decision-making and financial analysis.
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