Use the following information available at the end of 2012 to prepare an income statement and balance sheet on December 31, 2012, for Goldie Company.

. Use the following information available at the end of 2012 to prepare an income statement and balance sheet on December 31, 2012, for Goldie Company.

Fees for services performed during the year, $120,000
Accounts payable, $18,500
Accounts receivable, $17,300
Miscellaneous costs for the year, $8,700
Supplies on hand, $2,700
Notes payable outstanding, $30,000
Interest cost on the note for the year, $3,000
Equipment, $84,400
Cash on hand, $11,200
Salaries cost for the year, $71,500
Supplies cost for the year, $9,400
Rent cost for the year, $12,000
Common stock that has been issued, $60,000
Retained earnings at the end of the year, $7,100

172. List and describe the four financial statements most frequently provided to external users. 

The income statement presents revenues and expenses over an interval of time. The statement of shareholders' equity summarizes the changes in stockholders' equity (common stock and retained earnings) over an interval of time. The balance sheet presents the assets, liabilities, and stockholders' equity at a point in time. The statement of cash flows presents the cash flows over an interval of time for operating, investing, & financing activities.

173. How does the value of an audit affect financial statements? 

Outside auditors add credibility to financial statements, increasing the confidence of capital market participants who rely on financial statements in making investment and credit decisions and recommendations.

174. Define the four basic assumptions underlying Generally Accepted Accounting Principles:
(a) economic entity, (b) going concern, (c) periodicity, (d) monetary unit. 

Economic entity - All economic events can be identified with a particular economic entity. Going concern - In the absence of information to the contrary, it is anticipated that a business entity will continue to operate indefinitely. Periodicity - The life of a company can be divided into artificial time periods to provide timely information to external users. Monetary unit - In the U.S., financial statement elements should be measured in terms of the U.S. dollar. It assumes that the value of a dollar is stable over time.