Financial statement information about four different companies is shown on the next page.

Instructions

(a) Determine the missing amounts. (Hint: For example, to solve for (a), Assets — Liabilities = Stockholders’ Equity = $28,000.)

(b) Prepare the retained earnings statement for John Company. Assume beginning retained earnings was $0.

(c) Write a memorandum explaining the sequence for preparing financial statements and the interrelationship of the retained earnings statement to the income statement and balance sheet.

John Paul George Ringo Company Company Company Company January 1, 2014 Assets $ 78,000 $ 90,000 (g) $150,000 Liabilities 50,000

(d) $ 75,000 (j)
Stockholders’ equity

(a) 50,000 54,000 100,000 December 31, 2014 Assets

(b) 117,000 180,000 (k)
Liabilities 55,000 79,000 (h) 80,000 Stockholders’ equity 40,000

(e) 100,000 145,000 Stockholders’ equity changes in year 4 Additional investment

(c) 8,000 10,000 15,000 Dividends 10,000

(f) 12,000 10,000 Total revenues 350,000 390,000 (i) 500,000 Total expenses 335,000 400,000 360,000 (1)