Financial statement information about four different companies is as follows.

Instructions
a. Determine the missing amounts. (Hint: For example, to solve for (a), Assets − 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 January 1, 2020 $ 75,000 (g) $110,000 $150,000 Assets $ 75,000 Liabilities 48,000 (d) () Stockholders' equity (a) 60,000 45,000 100,000 December 31, 2020 (b) 137,000 200,000 (k) Assets Liabilities 55,000 75,000 (h) 80,000 Stockholders' equity 40,000 (e) 130,000 140,000 Stockholders' equity changes in year 15,000 Additional investment (c) 10,000 15,000 Dividends 6,000 (f) 10,000 14,000 Total revenues 350,000 420,000 (i) 500,000 Total expenses 335,000 382,000 342,000 (1)