Net Income (or Loss) and Retained Earnings The following information is available from the records of Prestige Landscape Design Inc. at the end of the 1998 calendar year:

Required Use the information above to answer the following questions:

1. What was Prestige's net income for the year ended December 31, 1998? 2. What is Prestige's retained earnings balance at the end of the year? 3. What is the total amount of Prestige's assets at the end of the year? 4. What is the total amount of Prestige's liabilities at the end of the year? 5. How much owners' equity does Prestige have at the end of the year? 6. What is Prestige's accounting equation at December 31, 1998?

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Accounts payable RS Accounts receivable A $ 5,000 4,000 BS Office equipment A $ 7,500 Rent expense E 6,500 Capital stock E 8,000 Cash A BS Retained earnings, 13,000 0 beginning of year 8,500 Dividends paid during the year OE S Salary and wage expense E 12,000 3,000 35 Supplies 500 TS Landscaping revenues R 25,000