Barrett, Inc. restores antique automobiles. The common shares and retained earnings balances of the corporation were $32,000

Question:

Barrett, Inc. restores antique automobiles. The common shares and retained earnings balances of the corporation were $32,000 and $28,500 respectively at December 31, 2012. During 2013, the corporation paid $35,000 in dividends to its shareholders. At December 31, 2013, the business’s accounting records show these balances:

Accounts Receivable $5,000

Note Payable 16,000

Retained Earnings ?

Salary Expense 16,000

Equipment 70,000

Insurance Expense 9,000

Cash $10,000

Accounts Payable 2,000

Advertising Expense 3,500

Service Revenue 70,000

Common Shares 32,000

Requirement

Prepare the following financial statements for Barrett, Inc.:

a. Income statement for the year ended December 31, 2013

b. Statement of changes in equity for the year ended December 31, 2013

c. Statement of financial position at December 31, 2013

Financial Statements
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