A sole proprietorship was started on January 1, 2010, when it received $80,000 cash from Derek Hughes, the owner. During 2010, the company earned $50,000 in cash revenues and paid $22,400 in cash expenses. Hughes withdrew $5,000 cash from the business during 2010.

Required

Prepare an income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for Hughes’s 2010 fiscal year.