SIMPLE INCOME STATEMENT

Company Name
Summary Income Statement
For the Month of XXXX, Year XXXX
Total revenues $XXXX
Less: Total expenses (excluding income taxes) XXXX
Income before income taxes XXXX
Less: Income tax expense XXXX
Net Income $XXXX  plug into RE

STATEMENT OF RETAINED EARNINGS

Company Name
Statement of Retained Earnings
For the Month of XXXX, Year XXXX
Retained earnings, Beginning $XXXX
Add Net Income for previous year XXXX
Subtract Dividends declared XXXXX
Retained earnings, ending XXXXX  plug into balance sheet

STATEMENT OF FINANCIAL POSITON (BALANCE SHEET)

Company Name
Statement of Financial Position
Date
Assets
Current Assets
XXXXX
XXXXX
XXXXX
Total Current Assets
Property, Plant, and equipment or Non-current assets
XXXX
XXXX
Less: Accumulated depreciation
Total property, plant, and equipment
Goodwill and Intangible assets
Other assets
Total assets
Liabilities and Shareholder’s Equity
Current liabilities
XXXX
XXXX
Total current liabilities
Long-term liabilities
XXXX
Total liabilities
Shareholder’s equity
Share capital
 Contributed surplus
Retained earnings
Other equity
Total shareholders’ equity
Total liabilities and shareholders’ equity

IMPORTANT NOTES: (MEMORIZE)

 The relationship between income statement & retained earnings is you PLUG the
income INTO the retained earnings
 The relationship between retained earnings & balance sheet is you PLUG the retained
earnings INTO the balance sheet
COGS (COST OF GOODS SOLD)- an expense
DIVIDENDS- has a debit balance and is also part of shareholder’s equity
3 steps for Journal entries:

1) Figure out the accounts that are affected. Figure out if accounts are decreasing or
increasing
2) Make sure Assets = Liabilities + Shareholder’s Equity
3) Debit and Credit the appropriate accounts
3 situations of DIVIDENDS:

1) Dividends declared but not paid

Dr. Dividends declared
Cr. Dividends payable
2) Dividends when we actually pay them
Dr. Dividends payable
Cr. Cash
3) Dividends declared and paid all at once
Dr. Dividends declared
Cr. Cash