(Solved by Humans)-Your Turn 1-7 1. The income statement gives the revenues and expenses for the period . The net...

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Your Turn 1-7 1. The income statement gives the revenues and expenses for the period . The net amount, net income, is added to retained earnings. So the income  statement  number becomes part of the retained  earnings total  on the year-end  balance  sheet. 2. The income statement shows all revenues and expenses for a period of time-all the rev­ enues that have been earned and expenses incurred to earn those revenues. The statement of cash flows simply lists the cash inflows and outflows during the period. The income statement and the statement of cash flows for Tom's Wear are different because Tom's Wear paid cash for some inventory that was not sold, so the cost of that inventory is not included in the income statement's cost of goods sold. Also, any transactions with own­ ers (contributions and dividends) are not included on the income  statement.