Prepare the financial statements

1 Record the transactions on the exhibit and/or spreadsheet.

2 The next part requires you to prepare financial statements. To facilitate this, do the following:

• Cash transactions: Make note of whether the item impacts operating, investing, or financing activitiesIncome statement transactions: Make note of what income statement line it impacts (e.g., Sales, Depreciation, Other operating expenses.
  Exercise 2Using the templates in Exhibit 2 or the accompanying spreadsheet, prepare the following financial statements for Yash:· Balance sheet at April 30, 2024· Income statement for April 2024 (i.e., the month ended April 30, 2024)· Cash flow statement for April 2024o Show both the direct method and indirect method format for cash from operating activitieso When preparing the indirect method cash flow statement, note that part of the accounts payable pertains to the April 2 equipment purchase and is therefore related to investing activities.· Statement of stockholders’ equity for April 2024

Assets
Transactions
Cash
A/R
Ppd. exp.
PP&E
Balance at Mar 31, 2024
$
0 $
0 $
0 $
0
4/1 Yash contributed $11,500 cash to the
business in exchange for common stock.
4/2 Paid $6,000 cash for a used truck that YRS
expects to last five years.
4/2 Purchased $1,800 of equipment; YRS paid
$800 cash, with the balance due in 30 days; YRS
expects the equipment to last three years.
4/3 Paid $2,880 for liability insurance covering
the two years beginning 4/1
4/5 Purchase $1,200 of supplies on credit, all of
which are used during April
4/5 Received advance of $1,800 from a customer
for work to be done in May
4/12 Billed customers $5,500 for roofing services
performed
4/18 Collected $4,900 of the $5,500 billed on
April 12
4/29 Paid $675 for truck fuel used in April.
4/30 Paid $100 for April newspaper advertising
4/30 Paid $4,500 for assistants’ wages earned
4/30 Billed customers $4,000 for roofing services
performed
Recorded one month’s depreciation for the truck
and equipment purchased 4/2
Balance at Apr 30, 2024
Liabilities
=
A/P
$
0
Liabilities
Def’d rev.
$
0
+
Equity
Comm. stk. Ret. earn.
$
0 $
0
Balance sheet
Apr 30 2024
Mar 31 2024
Cash
Accounts receivable
Prepaid expenses
Current liabilities
Property, plant, and equipment
Total assets
$
Accounts payable
Deferred revenue
Total liabilities
$
$
Common stock
Retained earnings
Total equity
Total liabilities and equity
$
–
Income statement
Apr 2024
Sales
Depreciation
Other operating expenses
Net income
Statement of stockholders’ equity
Common
stock
Balance at Mar 31 2024
Issuance of stock
Net income
Dividends
Balance at Apr 30 2024
$
–
Cash flow statement
Apr 2024
Cash from operating activities
Cash collected from customers
Cash paid to suppliers and employees
Cash from operating activities
Retained
earnings
$
–
Total
equity
$
–
Cash from investing activities
Capital expenditures
Cash from financing activities
Issuance of stock
Net change in cash
Beginning cash
Ending cash
Reconciliation of net income to cash from operating activities
Net income
Assets
Transactions
Cash
A/R
Ppd. exp.
PP&E
Balance at Mar 31, 2024
$
0 $
0 $
0 $
0
4/1 Yash contributed $11,500 cash to the
business in exchange for common stock.
4/2 Paid $6,000 cash for a used truck that YRS
expects to last five years.
4/2 Purchased $1,800 of equipment; YRS paid
$800 cash, with the balance due in 30 days; YRS
expects the equipment to last three years.
4/3 Paid $2,880 for liability insurance covering
the two years beginning 4/1
4/5 Purchase $1,200 of supplies on credit, all of
which are used during April
4/5 Received advance of $1,800 from a customer
for work to be done in May
4/12 Billed customers $5,500 for roofing services
performed
4/18 Collected $4,900 of the $5,500 billed on
April 12
4/29 Paid $675 for truck fuel used in April.
4/30 Paid $100 for April newspaper advertising
4/30 Paid $4,500 for assistants’ wages earned
4/30 Billed customers $4,000 for roofing services
performed
Recorded one month’s depreciation for the truck
and equipment purchased 4/2
Balance at Apr 30, 2024
Liabilities
=
A/P
$
0
Liabilities
Def’d rev.
$
0
+
Equity
Comm. stk. Ret. earn.
$
0 $
0
Balance sheet
Apr 30 2024
Mar 31 2024
Cash
Accounts receivable
Prepaid expenses
Current liabilities
Property, plant, and equipment
Total assets
$
Accounts payable
Deferred revenue
Total liabilities
$
$
Common stock
Retained earnings
Total equity
Total liabilities and equity
$
–
Income statement
Apr 2024
Sales
Depreciation
Other operating expenses
Net income
Statement of stockholders’ equity
Common
stock
Balance at Mar 31 2024
Issuance of stock
Net income
Dividends
Balance at Apr 30 2024
$
–
Cash flow statement
Apr 2024
Cash from operating activities
Cash collected from customers
Cash paid to suppliers and employees
Cash from operating activities
Retained
earnings
$
–
Total
equity
$
–
Cash from investing activities
Capital expenditures
Cash from financing activities
Issuance of stock
Net change in cash
Beginning cash
Ending cash
Reconciliation of net income to cash from operating activities
Net income