Listed below are financial statements for the Sunflower Company.
|
Income Statement |
|
|
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 |
|
Statement of Stockholders” Equity |
|||
|
Contributed |
Retained |
Total |
|
|
Balance at December 31, 2003 |
$5,000 |
$13,000 |
$18,000 |
|
Common stock issued |
2,000 |
2,000 |
|
|
Net income |
1,000 |
1,000 |
|
|
Dividends |
4,000 |
4,000 |
|
|
Balance at December 31, 2004 |
$7,000 |
$10,000 |
$17,000 |
|
Balance Sheet |
|||
|
Assets: |
Liabilities and Stockholders” Equity |
||
|
Cash |
$9,000 |
Accounts payable |
$5,000 |
|
Accounts receivable |
3,000 |
Notes payable |
8,000 |
|
Inventory |
2,000 |
Common stock |
7,000 |
|
Land |
16,000 |
Retained earnings |
10,000 |
|
Total$30,000 |
$30,000 |
Total |
$30,000 |
(a) Describe what is meant by the term articulation. (b) What evidence of articulation is there in this set of financial statements?