Chapter 1, Problem 1.9E

To determine

Income Statement: Income Statement is prepared by all the companies by enumerating all the expenses and revenues in the statement to calculate the resulting difference of Net Income or Net Loss.

Owner’s Equity Statement: Owner’s Equity Statement is the statement showing the balance of owner’s capital left at the end of the period after including the net income for the period and deducting the drawings by the owner.

Balance Sheet: A Balance Sheet is a statement showing the position of the assets, liabilities and the owner’s equity at the end of the financial year. Main components of a balance sheet are assets, liabilities and owner’s equity which are expressed in the following equation:

$\text{Assets}=\text{Liabilities}+\text{Owner's}\text{Equity}$

To Prepare: Income statement, owner’s equity statement and balance sheet.