PART I: Prepare Cash Basis Statements In December 2018, Amanda and Teresa acquired B-ME, Inc. and began operating the company on January 1, 2019. The balance sheet as of December, 31 2018 was: B-ME, Inc. BALANCE SHEET As of December 31, 2018 ASSETS LIABILITIES & EQUITY Current Assets: Cash 5,000 Inventory - Supplies 18,000 23,000 200,000 Building & Equipment Land 40,000 240,000 Total Assets 263,000 Long-term Assets: Current Liabilities: Accounts Payable Long-term Liabilities: Bank Loan Common Stock Retained Earnings Equity: Total Liabilities & Equity 63,000 200,000 0 200,000 263,000 B-ME, Inc. CASH RECEIPTS & EXPENDITURES FOR 2019 Cash Receipts: Sales 221,800 221,800 Total Cash Receipts Cash Disbursements: Wages & Salaries Expense 75,500 6,000 42,600 Heat, Light & Power Expenses More supplies (i.e. more Inventory Selling & Administrative Expenses Payment on Loan (Principal) Interest Expense on Loan 18,275 13,000 3,150 Total Cash Disbursements 158,525 Increase in Cash 63,275 In January 2020, Amanda and Teresa collected all their receipts/paid invoices and prepared their cash receipts & expenditures for 2019 (see chart) and posted them in Quick Books. They just hired Ryan as their new bookkeeper and asked him to prepare a Balance Sheet and Income Statement for 2019. Question: What should Ryan's Cash Basis Balance Sheet and Income Statement for 2019 look like? Remember: they made no accruals...just cash entries. PART III: Prepare Accrual Basis Statements for 2019 Together, they realized they now have enough information to prepare an accrual based Balance Sheet and Income Statement for 2019. Once again, they asked Ryan to prepare the financials. Question: What should Ryan's Accrual Basis Balance Sheet and Income Statement for 2019 look like? PART IV: Prepare a Cash Flow Statement for 2019 After a review of the Balance Sheet and Income Statement, Tom asked Kristie & Leah "Where's the Cash Flow Statement?". Again, they went to Ryan and he said "I'll do it, but it'll cost you". The next day, Ryan began putting one together. Question: What should Ryan's Statement of Cash Flow for 2019 look like? YOUR ANSWER TO PART III: Prepare 2019 Accrual Basis Statements B-ME, Inc. BALANCE SHEET As of December 31, 2019 (Accrual Basis) ASSETS LIABILITIES & EQUITY Current Assets: Cash Inventory - Supplies Total Current Liabilities Total Current Assets Long-term Assets: Building & Equipment Less: Land Total Long-term Assets Total Assets Current Liabilities: Accounts Payable Long-term Liabilities: Bank Loan Total Liabilities Equity: Common Stock Retained Earnings Total Equity Total Liabilities & Equity 332,500 INCOME STATEMENT For the Year Ended December 31, 2019 (Accrual Basis) Sales Expenses: Total Expenses NET INCOME