During the first week of January 1990, Ray Slovak began a repair business he calls Repairs Fast. He has kept no accounting records, but he does keep any unpaid invoices in a box near his workbench. He has kept a good record of the year's receipts and payments, which follows.

Ray would like to know how much the business actually earned during its first year. Therefore, he would like for you to prepare an accrual basis income statement, a statement of changes in owner's equity, and a year-end classified balance sheet for the shop.
You learn that the shop equipment has an estimated eight-year life, after which it will be worthless. There is a \(\$ 475\) unpaid invoice in the box near Ray's workbench for supplies received, and an inventory shows \(\$ 495\) of unused supplies on hand. The shop space rents for \(\$ 300\) per month on a five-year lease. The lease contract requires payment of the first and last months' rents in advance, which were paid. The insurance premiums were for two policies taken out on January 2. The first is a one-year policy that cost \(\$ 360\). The second is a two-year policy that cost \(\$ 816\). There are \(\$ 90\) of earned but unpaid wages owed the helper, and customers owe the shop \(\$ 580\) for repair services they have received.

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Investment Shop equipment. Repair parts and supplies Rent payments Insurance premiums paid Newspaper advertising paid Utility bills paid ... Receipts Payments $ 7,500 $ 6,000 6,315 3,900 1,176 375 970 Part-time helper's wages paid Ray Slovak for personal use 9,345 22,500 Revenue from repairs. . 44,930 Subtotals... $52,430 $50,581 Cash balance, December 31, 1990 1,849 Totals $52,430 $52,430