Resto Motors, Inc., restores antique automobiles. The retained earnings balance of the corporation was $22,400 at December 31, 2017. During 2018, the corporation paid $85,000 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 Resto Motors, 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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Accounts Receivable . $ 8,700 Note Payable . Retained Earnings. Salaries Expense. Cash . Accounts Payable. . Advertising Expense.. Service Revenue Common Stock Rent Expense Supplies .. $ 13,800 15,000 2,900 4,700 150,500 30,000 10,800 1,150 33,400 57,000 3,300 Equipment. Insurance Expense. Utilities Expense. 2,950