Classic Cars, Inc., restores antique automobiles. The retained earnings balance of the corporation was $22,300 at December 31, 2017. During 2018, the corporation paid $20,000 in dividends to its stockholders. At December 31, 2018, 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, 2018

b. Statement of retained earnings for the year ended December 31, 2018

c. Balance sheet at December 31, 2018

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