simplified income statement and balance sheet preparation

1. Preparation

2. Lesson Objectives:
At the end of the lesson, the learners shall be
able to:
a. Define Income Statement and Balance Sheet
b. Know the simplified formats of Income
Statement and Balance Sheet
c. Prepare Simplified Income Statement and
Balance Sheet

3. Examples of Financial
Statements
1. Income Statement
2. Balance Sheet
3. Statement of Cash Flows
4. Statement of Changes in Equity

4. INCOME STATEMENT
- other term for Comprehensive Statement
of Income
- Periodic financial income summary
- a financial statement showing the profit or
loss sustained by a company during a
particular period, including all items of
income and expenditure
- basically contains all the nominal accounts,
except the drawing accounts and the
income summary accounts

5. Simplified Format of an Income
Statement
Name of Company
Income Statement
Period Ended December 31, 20XX
Revenue XXX
Expenses XXX
Other Gains and Losses XXX
Net Income (Loss) XXX

6. BALANCE SHEET
- also known as the statement of financial
position
- it provides the amounts for the various
assets, liabilities, and owner’s capital
accounts.
- it contains real accounts

7. Name of Company
Balance Sheet
As of December 31, 20XX
Asset 1 Liability 1
Asset 2 Liability 2
Asset 3 Total Liabilities
Asset 4
Asset 5 Owner’s Capital
Total Assets Total Liabilities and Owner’s Capital
Simplified format of a Balance
Sheet

8. Owner’s Capital is determined as follows:
Owner’s Capital Balance (ATB) P 100,000.00
Net Income from the Income Statement 78,932.58
Owner’s Drawings (ATB) ( )
Owner’s Capital, Dec. 31, 2015 P 178,932.58

9. “
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-Edmund Burke