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Refer to AP 12–1.
Required: Prepare the equivalent income statement and statement of changes in equity for the year ended December 31, 2016 and a balance sheet at December 31 assuming that the partnership is instead:
- A proprietorship owned by J. Smith. (Combine S. Jones’ balances and transactions with those of J. Smith.)
- A corporation named JS and SJ Ltd. with 1,000 common shares issued to each of Smith and Jones for a stated value of $1 per share as of December 31, 2015. Assume opening retained earnings equal $44,000 and that 20,000 common shares were issued during 2016 for a stated value of $1 per share. Consider withdrawals to be dividends, and income taxes expense to be that of the corporation, not Smith personally.
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