In Part I, next to each item listed, you will identify which statement the item would appear. You will need to determine whether it would appear on the income statement (I), balance sheet (B), or statement of cash flows (CF). Then, for each group, explain the difference among the items listed. Finally, in Part II, discuss the relationship between the three financial statements.
Part I
Set 1:
_____ Inventory, ending balance
_____ Cost of goods (inventory) sold during the period
_____ Cash paid to suppliers during the period
_____ Accounts payable, ending balance
Difference:
Set 2:
_____ Accounts receivable, ending balance
_____ Cash received from customers
_____ Sales
Difference:
Set 3:
_____ Wage expense for the period
_____ Wages payable, ending balance
_____ Cash paid for wages during the period
Difference:
Set 4:
_____ Property, plant, and equipment, ending balance
_____ Cash paid for property, plant, and equipment during the period
_____ Cash received from selling property, plant, and equipment during the period
_____ Depreciation expense during the period (expense of using property, plant, and equipment during the period)
Difference:
Set 5:
_____ Notes payable, ending balance
_____ Cash received from borrowing money during the period
_____ Cash used to pay off notes payable during the period
_____ Interest expense during the period (expense of using borrowed money during the period)
Difference:
Part II
Discuss the Relationship between the financial statements identified: