Answer:
STARK COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31
PARTICULARS AMOUNT
$
Service Revenue 20,000
<u>Expenses</u>
Supplies expense 200
Interest expense 500
Insurance expense 1,800
Utilities expense 1,300
Depreciation expense 2,000
Wages expense <u>7,500</u>
Total expenses <u>13,300</u>
Net profit <u>6,700</u>
STARK COMPANY
STATEMENT OF RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31
Amount
$
Retained earnings December 31 prior year end 14,800
Add- Net income 6,700
Less- Dividends 3,000 <u>3,700</u>
Retained earnings, December 31 Current year end <u>18,500</u>
3. STARK COMPANY
BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31
Current Assets
Cash 10,000
Accounts receivable 4,000
Office supplies 800
Prepaid insurance <u>2,500</u>
Total current asset 17,300
Non Current Assets
Buildings 40,000
Less- Accumulated dep. <u>15,000</u>
Total Non Current Assets <u>25,000</u>
Total Assets <u>42,300
</u>
Liabilities
Current liabilities
Accounts payable 1,500
Interest payable 100
Notes payable 11,000
Unearned revenue 800
Wages payable <u>400 </u>
Total Current liabilities 13,800
Long term liabilities
Common stock 10,000
Retained earnings 18,500 <u>28,500</u>
Total liabilities and capital <u>42,300</u>
