tehrdelete home 90 backspace 5 6 8 Using the Accounting Equation to Prepare Financial Statements The following items and amounts were taken from Lotte Inc.'s 2017 financial statements. Cash Retained earnings (1/1/17) 123,192 Sales revenue Cost of goods sold Salaries and wages expense 115,131 Accounts payable Prepaid insurance Inventory $ 84,700 Accounts receivable $ 88,419 584,951 6,499 49,384 4,806 1,882 438,192 Notes payable 7,818 Service revenue 64,618 Interest expense Instructions (a) Prepare a balance sheet as of December 31, 2017 (b) What percentage of assets do the shareholders' have claim to? REMEMBER: > The financial statements need to be prepared in a certain order and the balance sheet is not first. Not all accounts are shown but can be determined by the accounting equation. The accounting equation works this way (A = assets, L= Liabilities, E-Equity: CS-Common Stock; RE- Retained Earnings A-L E; or expanded to state it another way As L + CS + End of Year RE, or expanded again to state this way: o ALCS+Beg of Year RE + Revenues- expenses - dividends