Financial statement information about four different companies is as follows.

Instructions
(a) Determine the missing amounts. (Hint: For example, to solve for (a), Assets ˆ’ Liabilities =
Stockholders' Equity = $27,000.)
(b) Prepare the retained earnings statement for Leonardo Company. Assume beginning retained earnings was $20,000.
(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.

Transcribed Image Text:

Donatello Leonardo Michelangelo Raphael Company Company Company Company $150,000 100,000 January 1, 2019 Assets Liabilities Stockholders' equity S 75,000 $110,000 60,000 137,000 5 48,000 75,000 45,000 200,000 130,000 10,000 December 31, 2019 Assets Liabilities Stockholders' equity 55,000 40,000 75,000 80,000 140,000 Stockholders' equity changes in year Additional investment Dividends Total revenues Total expenses 15,000 15,000 10,000 500,000 6,000 14,000 350,000 420,000 335,000 382,000 2 342,000