Financial statement information about four different companies is as follows.
|
January 1, 2010 |
Karma |
Yates |
McCain |
Dench |
|
Assets |
$ 95,000 |
$110,000 |
(g) |
$170,000 |
|
Liabilities |
50,000 |
(d) |
75,000 |
( j) |
|
Owner’s equity |
(a) |
60,000 |
45,000 |
90,000 |
|
December 31, 2010 |
||||
|
Assets |
(b) |
137,000 |
200,000 |
(k) |
|
Liabilities |
55,000 |
75,000 |
(h) |
80,000 |
|
Owner’s equity |
60,000 |
(e) |
130,000 |
170,000 |
|
Owner’s equity changes in year |
||||
|
Additional investment |
(c) |
15,000 |
10,000 |
15,000 |
|
Drawings |
25,000 |
(f) |
14,000 |
20,000 |
|
Total revenues |
350,000 |
420,000 |
(i) |
520,000 |
|
Total expenses |
320,000 |
385,000 |
342,000 |
(l) |
Instructions
(a) Determine the missing amounts. (Hint: For example, to solve for (a), Assets Liabilities + Owner’s equity =$45,000.)
(b) Prepare the owner’s equity statement for Yates Company.
(c) Write a memorandum explaining the sequence for preparing financial statements and the interrelationship of the owner’s equity statement to the income statement and balance sheet.