Reference no: EM13884487

Preparation and Interpretation of Financial Statements

Fuel Designs' financial accounts follow. The company has just completed its tenth year of operations ended December 31, 2014.

Accounts Payable	$ 3,600
Accounts Receivable	4,500
Cash	71,700
Commission Sales Revenue	400,000
Commissions Expense	225,000
Commissions Payable	22,700
Equipment	59,900
Marketing Expense	20,100
Office Rent Expense	36,000
Owner's Capital, December 31, 2013	64,300
Supplies	700
Supplies Expense	2,600
Telephone and Computer Expenses	5,100
Wages Expense	32,000
Withdrawals	33,000

Required:

1. Prepare Fuel Designs' income statement, statement of owner's equity, and balance sheet. There were no investments by the owner during the year.

2. Accounting Connection- The owner is considering expansion. What other financial statement would be useful to the owner in assessing whether the compa- ny's operations are generating sufficient funds to support the expenses? Why would it be useful?