Question

A. Evaluate the financial statement drawn by answering the questions below:
BloomsCompany
Statement of FinancialPerformance
As of December 31,2020
a. Revenues - 5,400,000
b. Cost of Sales - 3,000,000
c. OperatingExpenses(excluding depreciation)-900,000
d. DepreciationExpense - 200,000, 4,100,000
e. Net Income - 1,300,000
-Thefollowing balances are reported on December31:
a. Cash in 2019 is 450,000; in 2020 is 1,170,000
b. AccountsRecievable in 2019 is 1,010,000; in 2020 is 1,170,000
c. Inventories in 2019 is 250,000; in 2020 is 320,000
d. AccountsPayable in 2019 is 720,000; in 2020 700,000
-Additional cash transactions are as follows:
1. The company bought a delivery truck for 2,000,000 cash.
2. A long term loan for 1,800,000 was obtained from the bank .
3. The proprietress Fleur Elise withdrew 200,000.
(Did the company prepare the correct heading for its income statement? How should you write the heading of this financial report?)

Answer 1

No, the company did not prepare a proper heading for its income statement.

A proper income statement should be written as follows:

Blooms Company

Income Statement

For the year ended December 31, 2020