Chapter 2, Problem 2.12P

1.

To determine

Income statement:

This is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time. It is prepared to find out the net income of an organization.

Balance sheet:

Balance sheet is a financial position statement that represents all the assets, liabilities, and stockholders’ equity of a concern on a particular date. The balance sheet displays that on a particular date, all the assets of concern must be equal to the sum of liabilities and stockholders’ equity.

To Prepare: An accrual basis income statement for the year 2021.

2.

To determine

Income statement:

This is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time. It is prepared to find out the net income of an organization.

Balance sheet:

Balance sheet is a financial position statement that represents all the assets, liabilities, and stockholders’ equity of a concern on a particular date. The balance sheet displays that on a particular date, all the assets of concern must be equal to the sum of liabilities and stockholders’ equity.

The following balance sheet amounts on December 31, 2021.