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description: Prepare income statement, balance sheet, and cash flow statement
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# Financial Statements
Prepare financial statements for "$ARGUMENTS". Use the adjusted trial balance to produce the income statement, balance sheet, and statement of cash flows.
## Prerequisites
Read `.metapowers/accounting/$ARGUMENTS/06-adjusted-balance.md` for the adjusted trial balance. Reference `shared/financial-statements-template.md` for the statement format.
## Process
1. **Prepare the Income Statement:**
- List all revenue accounts and their adjusted balances
- List all expense accounts and their adjusted balances
- Calculate gross profit (if applicable), operating income, and net income
- Include earnings per share if the entity is a corporation
2. **Prepare the Balance Sheet:**
- **Assets** — list current assets (cash, receivables, inventory, prepaid) and non-current assets (PP&E, intangibles) with subtotals
- **Liabilities** — list current liabilities (payables, accrued, unearned) and non-current liabilities with subtotals
- **Equity** — list contributed capital, retained earnings (including current period net income)
- Verify that total assets equal total liabilities plus equity
3. **Prepare the Cash Flow Statement:**
- **Operating activities** — start with net income, adjust for non-cash items and working capital changes (indirect method)
- **Investing activities** — purchases and sales of long-term assets
- **Financing activities** — debt proceeds/repayments, equity transactions, dividends
- Verify ending cash matches the balance sheet cash balance
4. **Write the artifact** to `.metapowers/accounting/$ARGUMENTS/07-statements.md` with sections:
- **Income Statement** — complete statement for the period
- **Balance Sheet** — complete statement as of period end
- **Cash Flow Statement** — complete statement for the period
- **Notes** — significant accounting policies, footnote disclosures
## Output
The financial statements written to `.metapowers/accounting/$ARGUMENTS/07-statements.md`. Present a summary highlighting:
- Net income (loss) for the period
- Total assets and total liabilities
- Net cash position and change in cash
