Financial statement information about four different companies is as follows.

Instructions
a. Determine the missing amounts. For example, to solve for (a), Assets − Liabilities = Equity = HK$250,000.

b. Prepare the retained earnings statement for Stills Company. Assume beginning retained earnings was HK$200,000.

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

Transcribed Image Text:

Crosby Company Stills Nash Young Company Company Company January 1, 2020 HK$ 900,000 HK$1,100,000 650,000 Assets HK$1,500,000 HK$ 750,000 Liabilities (d) 500,000 (j) 1,000,000 Equity December 31, 2020 Assets (a) 450,000 (k) (b) 1,370,000 750,000 2,000,000 (h) 1,300,000 Liabilities 550,000 800,000 Equity Equity changes in year 400,000 (e) 1,400,000 Additional investment (c) 150,000 (f) 4,200,000 3,850,000 100,000 140,000 150,000 Dividends Total revenues 100,000 100,000 3,500,000 (i) 3,420,000 5,000,000 Total expenses 3,300,000 (1)