Here are incomplete financial statements for Deol Company:

Instructions

a. Calculate the missing amounts (i) to (x).

b. Write a memo explaining (1) the sequence for preparing the fi nancial statements, and (2) the interrelationships between the income statement, statement of owner?s equity, and balance sheet.

Taking It Further

Why aren?t the income statement and the statement of owner?s equity dated the same way as the balance sheet: ?October 31, 2021??

Transcribed Image Text:

DEOL COMPANY Balance Sheet October 31, 2021 Liabilities and Owner's Equity Assets $ 5,000 Cash Liabilities $59,600 Accounts receivable Notes payable Accounts payable 10,000 (i) Land (ii) Building and equipment 45,000 Total liabilities 66,500 Owner's equity B. Deol, capital Total liabilities and owner's equity (iii) 2$ (iv) Total assets $110,000 DEOL COMPANY Income Statement Year Ended October 31, 2021 Revenues $80,000 Service revenue Expenses Salaries expense Other expenses Supplies expense Total expenses $37,500 (v) 6,000 62,500 Profit 2$ (vi) DEOL COMPANY Statement of Owner's Equity Year Ended October 31, 2021 B. Deol, capital, November 1, 2020 $35,000 (vii) (viii) Add: Investments Profit 57,500 (ix) Less: B. Deol, drawings B. Deol, capital, October 31, 2021 (х) 24