Chapter 1, Problem 1.14E

(a)

To determine

Financial Statements: The statement prepared for the specific period which comprises the financial information of the organization. It includes a statement of income which shows the profitability of the business, balance sheet which shows the financial position in the terms of assets, liabilities, and capital, and cash flow statement which represents the cash flows for the accounting period.

Income Statement: Income Statement is a periodical statement prepared to show the profitability of the business conducted for a particular period. It records all expenses, losses, incomes, and gains related to a particular period. Expenses and losses are debited in the income statement. Incomes and gains are credited to the Income Statement.

To Determine: The net income of Company C for the year ended December 31, 2017.

(b)

To determine

Balance Sheet: Balance Sheet is a financial position statement classified into organization’s assets, stockholder’s equity and other liabilities at a particular date. One side is Organization’s assets and another side is stockholder’s equity and other liabilities. Both the sides should be balanced to each other.

To prepare: The balance sheet of Company C for the year ended December 31, 2017.