Prepare a set of financial statements for the stockholders for the year 2003: a statement of financial position at December 31, 2003; an income statement and a statement of cash flows for the year ended December 31, 2003.

5. How would you have reported to stockholders on the financial performance of Chemalite, Inc., for its first year, January 1, 2003 to December 31, 2003?        

The financial performance of Chemalite, Inc., for its first year, January 1, 2003 to December 31, 2003 appears to be rather productive.  As you can see from the Balance Sheet, there are no bills owed in Accounts payable pr the long-term loans account.  The corporation seems to have enough assets to cover their bills in the immediate or near future.  The Income Statement shows that the income was greater than the expense paid out so the corporation has generated a surplus and not a deficit.  The Cash Flow statement shows that the bulk of the cash is drained from the purchase of machinery for $212,500.  But the cash on hand on June 30, 2003 indicated a positive outflow.