Chapter 1, Problem 1.12E

(a)

To determine

Income Statement:

Income statement is one of the financial statements that show the net income earned or net loss suffered by a company by reporting all the revenues earned and expenses incurred by the company over a particular period. This statement is also known as operations statement, earnings statement, revenue statement, or profit and loss statement. The net income is the excess of revenue over expenses.

To prepare: The income statement of LG Company for the year ending December 31, 2019.

(b)

To determine

Retained Earnings Statement:

Retained earnings statement is one of the financial statements that show the amount of net income retained by a company at a particular point of time for reinvestment and used to pay its debts and obligations. It reflects the amount of earnings that is not paid as dividends to the shareholders.

To prepare: The retained earnings statement of LG Company for the year ending December 31, 2019.