THE FINANCIAL STATEMENTS

Income statement reports income or loss of a company for a period which is specified. The revenues are listed and the expenses for the period are subtracted. A balance that is positive results in an income whereas a balance that is negative represents a loss.

	Rya’s Planning services
	Income statement
Revenues
planning fees Income		26,250

Expenses
Office supplies expenses	200
Rent expenses	800
salaries expenses	3,000
utilities expenses	700
Total expenses		-4700
Net income		21,550

Owner’s equity statement reports the changes in the equity of the owner for a period of time which is specified.

	Rya’s Planning Services
	Statement of owner’s equity
Capital	28,000
Net income	21,550
Less drawings	-5,000

Capital at year end	44,550

Balance sheet reports the financial position of a business for a period of time that is specified.

		Rya’s Planning Services
		Balance sheet
Non current assets
Equipment		15,000

Current assets
Cash	21500
Account receivable	17,500
Office supplies	500	39,500
Total assets		54500

Equity
Retained earnings	21,550
Capital	28000
less drawings	-5,000	44,550

Current liabilities
Accounts payable		9,750
Total equity		54,300