P1-5A

Determine financial statement amounts and prepare owner's equity statement.

(LO 4, 5)

Financial statement information about four different companies is as follows.

	Alpha Company	Beta Company	Psi Company	Omega Company
January 1, 2017
Assets	$80,000	$90,000	(g)	$150,000
Liabilities	41,000	(d)	80,000	(j)
Owner's equity	(a)	40,000	49,000	90,000
December 31, 2017
Assets	(b)	112,000	170,000	(k)
Liabilities	60,000	72,000	(h)	100,000
Owner's equity	50,000	(e)	82,000	151,000
Owner's equity changes in year
Additional investment	(c)	8,000	10,000	15,000
Drawings	15,000	(f)	12,000	10,000
Total revenues	350,000	410,000	(i)	500,000
Total expenses	333,000	385,000	350,000	(l)

Instructions

(a)

Determine the missing amounts.

(Hint: For example, to solve for (a), .)

(b)

Prepare the owner's equity statement for Alpha Company.

(c)

Write a memorandum explaining the sequence for preparing financial statements and the interrelationship of the owner's equity statement to the income statement and balance sheet.