Chapter 1, Problem 1.2APR

a)

To determine

Financial statements:

Financial statements refer to those statements, which are prepared by the Company according to particular formats in accounting to show its financial position. The financial statements consist of the balance sheet, income statement, statement of owners’ equity, and the cash flow statement.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

Statement of owner's’ equity:

The statement of owner's equity reports the changes in the owner's equity for a period of time.

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

To prepare: The income statement for the year ended December 31, 2016 for NT Agency.

b)

To determine

To prepare: The statement of owner's equity for the year ended December 31, 2016 for NT Agency.

c)

To determine

To prepare: The balance sheet for the year ended December 31, 2016 for NT Agency.

d)

To determine

To Identify: The items that appear on both statement of owner's equity and balance sheet of NT Agency.