Following are the amounts of the assets and liabilities of Pedigree Travel Agency at December 31, 2008, the end of the current year, and its revenue and expenses for the year. The capital stock was \(\$ 40,000\) and the retained earnings was \(\$ 75,000\) on January 1,2008 , the beginning of the current year. During the current year, dividends of \(\$ 40,000\) were paid.

{Instructions}
1. Prepare an income statement for the current year ended December 31, 2008.
2. Prepare a retained earnings statement for the current year ended December 31, 2008.
3. Prepare a balance sheet as of December 31, 2008.

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Accounts payable Accounts receivable Cash $ 12,500 Rent expense $25,000 42,300 Supplies 2,700 180,000 Supplies expense 2,800 Fees earned 250,000 Utilities expense 18,200 Miscellaneous expense 1,500 Wages expense 65,000