Classic Cars, Inc., restores antique automobiles. The retained earnings balance of the corporation was $22,300 at December 31, 2015. During 2016, the corporation paid $20,000 in dividends to its stockholders. At December 31, 2016, the business's accounting records show these balances:

Requirements
1. Identify each amount shown as an asset, liability, or stockholders' equity.
2. Prepare the following financial statements for Classic Cars, Inc.:
a. Income statement for the year ended December 31, 2016
b. Statement of retained earnings for the year ended December 31, 2016
c. Balance sheet at December 31, 2016?

Transcribed Image Text:

Accounts Receivable. Note Payable. Retained Earnings. Salaries Expense. Equipment.. Insurance Expense. Utilities Expense. Cash . Accounts Payable.. Advertising Expense.. Service Revenue Common Stock Rent Expense Supplies $11,600 $12,300 6,150 18,000 3,100 68,900 32,000 7,700 850 22,600 65,000 2,800 1,400