Question

show how the following events and transactions should appear on your personal incomestatement,
balance sheet,and cash flow statement.
a.On july 1,200X, you receive $20,000 in gifts upon graduation from school and
pay off a $10,000 student laon

Answer 1

Income statement:

Profit = Revenue – Costs

Profit = $20,000 - $10,000 = $10,000

Cash Flow statement:

The same as for profit

Cash Flow = Cash Flow + Cash Flow = $20,000 - $10,000 = $10,000

Balance sheet:

Balance sheet is increasing by $20,000.