Estella Osage publishes an online travel magazine. In need of cash, the business applies for a loan with National Bank. The bank requires borrowers to submit financial statements. With little knowledge of accounting, Estella Osage, a stockholder, does not know how to proceed.

Requirements

1. What are the four financial statements that the business will need to prepare?

2. Is there a specific order in which the financial statements must be prepared?

3. Explain how to prepare each statement.