12 Shallow Waters Company was started several years ago by two diving instructors. The company's comparative balance sheets and income statement are presented below, along with additional information Current Year S 4,000 Prior Year Balance Sheet at December 31 Cash Accounts receivable Prepaid expenses Equipment 1,200 110 500 $ 4,500 900 170 Wages payable Contributed capital Retained earnings $ 5,810 $ 490 $ 5,570 $ 1,250 1,700 2,500 2,8202620_ 2.620 $ 5,810 $ 5,570 Income Statement for Current Year Lessons revenue Wages expense Other expenses Net income $38,450 34,000 4.250 $ 200 Additional Data a. Prepaid expenses relate to rent paid in advance b. Other expenses were paid in cash c. Purchased equipment for $500 cash at the end of the prior year to be used starting in current year d. An owner contributed capital by paying $800 cash in exchange for the company's stock