On January 1, 2020, Fireworks Fantasia entered its third year of operations. On December 31, 2020, Wes Gandalf, the owner, finalized the company?s records that showed the following items.

The ending capital balance for one period is the beginning capital balance for the next period. The owner made investments of $30,000 during the year ended December 31, 2020.

Required

Prepare an income statement and statement of changes in equity for the year ended December 31, 2020, and a December 31, 2020, balance sheet, similar to Exhibits 1.8, 1.9, and 1.10.

Analysis Component: Analyze the balance sheet and calculate what percentage of the assets at December 31, 2020, were financed by (a) debt and (b) equity.

Exhibits 1.8, 1.9, and 1.10.

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Accounts payable. Accounts receivable. Advertising expense. Building. Cash Office supplies.. Office supplies expense. Rent revenue. Service Revenue. $ 3,000 3,600 $58,000 14,000 9,000 66,000 140,000 18,000 25,100 81,000 8,000 49,000 Tools. Fireworks supplies.. Fireworks supplies expense Land. Utilities expense. Wages expense. Wes Gandalf, capital, December 31, 2019*.. 92,000 175,200 77,500 63,000 Office equipment. 14,000 Wes Gandalf, withdrawals. 12,000 EXHIBIT 1.8 Income Statement for Organico Organico Income Statement For Month Ended March 31, 2020 Revenues: Food services revenue. $3,800 Teaching revenue 300 Total revenues $4,100 Operating expenses: Rent expense. $1,000 Salarles expense. Total operating expenses. 700 1,700 Profit. $2,400 EXHIBIT 1.9 Statement of Changes in Equity for Organico Organico Statement of Changes In Equity For Month Ended March 31, 2020 Halley Walker, capital, March 1 Investments by owner 2$ -0- $10,000 Profit. 2,400 12,400 Total. $12,400 Less: Withdrawals by owner 600 Halley Walker, capiltal, March 31. $11,800- EXHIBIT 1.10 Balance Sheet for Organico Organico Balance Sheet March 31, 2020 Assets Llabilities $8,400 Accounts payable. 3,600 Notes payable. 6,000 Cash. $ 200 Supplies. 6,000 Equipment. $ 6,200 Total liabilities. Equity Halley Walker, capital $18,000 Total liabilitles and equlty. 11,800 $18,000 Total assets EXHIBIT 1.11 Statement of Cash Flows for Organico Organlco Statement of Cash Flows For Month Ended March 31, 2020 Cash flows from operating activitles $ 4,100 (3,400) (1,000) Cash recelved from clients. Cash pald for supplies Cash pald for rent. Cash pald to employee. Net cash used by operating activitles Cash flows from Investing activities. (700) $(1,000) -0- Cash flows from financing activities Investment by owner Withdrawal by owner. Net cash provided by financing activitles. $10,000 (600) 9,400 Net Increase In cash. Cash balance, March 1 $8,400 -0- Cash balance, March 31.. $8,400 The arrows are provided for education purposes only to omphasize the link batwoen statemonts.