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 2010 calendar year:

Accounts payable $ 5,000 Landscaping revenues $25,000 Accounts receivable 4,500 Offi ce equipment 7,500 Capital stock 8,000 Rent expense 6,500 Cash 13,000 Retained earnings, Dividends paid beginning of year 8,500 during the year 3,000 Salary and wage expense 12,000 Required Use the previous information to answer the following questions.

1. What is Prestige’s net income for the year ended December 31, 2010?

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, 2010?

AppendixLO1