Chapter 4, Problem 4.2EYCT

(a)

To determine

Financial Statements: A financial statement is a complete record of the financial transactions that takes place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. There are four basic financial statements; they are the income statement, retained earnings statement, balance sheet, and statement of cash flows.

The total current assets, net amount of property, plant, and equipment, total current liabilities, and total equity for Company P and Company C, in (1), (2), (3), and (4).

(b)

To determine

To explain: The financial position of the two companies