A company makes a $100 sale on credit. What happens on the three statements?

I'll use a 25% tax rate, and I'll treat this as a service with no cost of goods sold. On the income statement, revenue is up $100. It counts now because the company has delivered, even though the customer hasn't paid. With no costs against it, pre-tax income is up $100, tax is $25 and net income is up $75. On the cash flow statement, I begin with the $75 of net income. Accounts receivable went up by $100, and that's revenue I haven't collected, so I take $100 off. Cash flow from operations is down $25, and so is cash. On the balance sheet, receivables are up $100 and cash is down $25, so assets are up $75. Retained earnings are up $75 on the other side. Nothing else moves, so it balances.

Two assumptions first. I'll use a 25% tax rate, and I'll treat this as a service with no cost of goods sold. If you want a product, I can add that after. On the income statement, revenue is up $100. It counts now because the company has delivered, even though the customer hasn't paid. With no costs against it, pre-tax income is up $100, tax is $25 and net income is up $75. On the cash flow statement, I begin with the $75 of net income. Accounts receivable went up by $100, and that's revenue I haven't collected, so I take $100 off. Cash flow from operations is down $25, and so is cash. The company made a profitable sale and has less cash, because it paid tax on income it hasn't collected. On the balance sheet, receivables are up $100 and cash is down $25, so assets are up $75. Retained earnings are up $75 on the other side. Nothing else moves, so it balances. When the customer pays, the income statement isn't touched, because the revenue was booked at the sale. Receivables drop by $100, which is a $100 inflow in cash flow from operations. On the balance sheet, cash goes up $100 as receivables go down $100, so total assets don't change. Over both steps, cash is up $75, the same as net income. For a product, I'd add cost of goods sold on the income statement and take the same amount out of inventory. And if the tax weren't due until later, I'd show $25 of taxes payable in place of the cash going out, and cash would be flat at the sale.