Listed below are financial statements for the Sunflower Company.

Income Statement

For the Year Ended December 31, 2004

Sales revenue ............$ 20,000

Cost of sales .............. (12,000)

Gross profit ............. 8,000

Operating expenses .......... (4,000)

Selling and administrative expenses ... (3,000)

Net income ............ $ 1,000

(a) Describe what is meant by the term articulation.

(b) What evidence of articulation is there in this set of financial statements?

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Statement of Stockholders' Equity For the Year Ended December 31, 2004 Contributed Retained Total Capital $5,000 Eamings $13,000 $18,000 2,000 1,000 (4,000) $17,000 Balance at December 31, 2003 Common stock issued 2,000 Net income 1,000 (4,000) $10,000 Dividends Balance at December 31, 2004 $7,000 Balance Sheet as of December 31, 2004 Assets: Liabilities and Stockholders' Equity Accounts payable Notes payable Common stock Retained earnings $ 9,000 3,000 2,000 16,000 $30,000 $ 5,000 8,000 7,000 10,000 $30,000 Cash Accounts receivable Inventory Land Total Total