Prepare an Income Statement and a Statement of Owner's Equity

question 24

Essay

Prepare an income statement and a statement of owner's equity, for the month ended August 31, 2014, from the following T-Accounts of Marley Company.

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, presented in a structured manner.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments have been made for errors, accruals, and deferrals in the accounting period.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, helping to prepare the books for the next period.

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse certain adjusting entries made in the previous period.