Barrett, Inc., restores antique automobiles. The retained earnings balance of the corporation was \($28,500\) at December 31,2009. During 2010, the corporation paid \($35,000\) in dividends to its stockholders. At December 31,2010, the business’s accounting records show these balances:

Requirement 1. Prepare the following financial statements for Barrett, Inc.:

a. Income statement for the year ended December 31,2010

b. Statement of retained earnings for the year ended December 31,2010

c. Balance sheet at December 31,2010

Transcribed Image Text:

Accounts Receivable Note Payable....... $ 5,000 Cash............ $10,000 16,000 Accounts Payable....... 2,000 Retained Earnings.. ? Advertising Expense.... 3,500 Salary Expense........ 16,000 Service Revenue 70,000 Equipment............ 70,000 Common Stock. 32,000 Insurance Expense. 9,000