Here are incomplete financial statements for Lee Company:

Instructions

a. Calculate the missing amounts (i) to (x).

b. Write a memo explaining

(1) the sequence for preparing the financial statements,

(2) the interrelationships between the income statement, statement of owner?s equity, and balance sheet.

Taking It Further

Why isn?t the balance sheet dated the same way as the income statement and statement of owner?s equity: ?Year Ended February 28, 2021??

Transcribed Image Text:

LEE COMPANY Balance Sheet February 28, 2021 Liabilities and Owner's Equity Assets $ 9,500 Cash Liabilities Notes payable Accounts payable Accounts receivable 5,300 $26,000 (iii) Land (1) Building and equipment 41,500 Total liabilities 43,800 (iv) M. Lee, Capital Total liabilities and owner's equity $ (1i) Total assets $91,300 LEE COMPANY Income Statement Year Ended February 28, 2021 Revenues Service revenue $95,000 Expenses Salaries expense Other expenses Supplies expense Total expenses $32,000 (v) 1,500 59,500 (vi) Profit LEE COMPANY Statement of Owner's Equity Year Ended February 28, 2021 M. Lee, capital, March 1, 2020 $22,000 (vii) (viii) Add: Investments Profit 62,500 (ix) Less: M. Lee, drawings M. Lee, capital, February 28, 2021 (х)