PI-5A Financial statement information about four different companies is as follows.

(b) Net income $4,050

(c) Cash $8,200 Determine financial statement Karma Yates McCain Dench amounts and prepare retained earnings statement.

Company Company Company Company (SO 7, 8)

January 1,2008 Assets $ 95,000 $110,000 (g) $170,000 Liabilities 50,000

(d) 75,000 (j)

Stockholders’ equity

(a) 60,000 45,000 90,000 December 31,2008 Assets

(b) 137,000 200,000 (k)

Liabilities 55,000 75,000 (h) 80,000 Stockholders’ equity 60,000

(e) 130,000 170,000 Stockholders’ equity changes in year Additional investment

(c) 15,000 10,000 15,000 Dividends 25,000

(f) 14,000 20,000 Total revenues 350,000 420,000 (i) 520,000 Total expenses 320,000 385,000 342,000 (1)

Instructions

(a) Determine the missing amounts. (Hint: For example, to solve for (a), Assets -- Liabilities =

Stockholders’ Equity = $45,000.)

(b) Prepare the retained earnings statement for Yates Company. Assume beginning retained earnings was $20,000.

(c) HttBr 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.