Limited Data Allows Balance Sheet-Like Statement Only

Steps:

• Note available data: purchases for the year and end-of-year asset/liability values.
• Recognize statement of affairs as a balance sheet substitute, prepared from current assets and liabilities.
• Confirm income statement requires full revenues/expenses (e.g., sales, costs beyond purchases), which are missing.
• Conclude only statement of affairs is feasible; income statement lacks sufficient details.

Why C is correct:

• Statement of affairs is defined as a snapshot of net worth from assets minus liabilities at a point in time, directly using given end-of-year values.

Why the others are wrong:

• A: Income statement cannot be prepared due to incomplete expense/revenue data.
• B: Statement of affairs can be prepared from asset/liability values.
• D: Statement of affairs can be prepared from asset/liability values.

Final answer: C