Financial statements comprise four major statement., Income Statement, , Statement of Stockholders Equity, and Statement of Cash Flow. These statements are the record of operating performance with its impact on financial position and progress of the enterprise.

Income statement, also called Profit and Loss statement, is a performance report which records profits and losses as a result of business operations during the accounting period (i.e. month, year). Statement of Stockholders'Equity reports the changes in the business Common Stock and Retain Earnings account during the accounting period. Balance sheet reports the financial position (health) of the business at a given time. The statements are interrelated in many ways that requires the statements be prepared in the following order.

1. Income statements (Net income or Net loss flows into Statement of Stockholders' Equity)

2. Statement of Stockholders' Equity (Ending Balance of Common Stock and Retained Earnings flow into Balance Sheet)

3. Balance Sheet

4. Statement of Cash Flows (Cash Balance from Balance Sheet flows into this statement)

The following exercise test your understanding of the nexus between the first 3 financial statements.

BULLDOG, INC. Income Statement $34,000 Revenues Expenses: Salaries Advertising Utilities Net income BULLDOG, INC. Statomont of Stockholders' Equity Common Retained Stock Earnings Beginning balance $ 9,000 $6,000 Issuances 1,000 Add: Net income (c) Less: Dividends (2,000) Ending balance $10,000 $9,000 Total S. Equity $15,000 1,000 (a) 5,000 3,000 (2,000) $19,000 Assets Cash Accounts receivable Supplies Equipment BULLDOG, INC. Balance Shoot Liabilities $ 3,000 Accounts payable 2,000 Stockholders' Equity 8,000 Common stock 9,000 Retained earnings Total liabilities and $22,000 stockholders' equity Total assets Required: Calculate the missing amounts