Exercise 1-10A Link the income statement to the statement of stockholders' equity (LO1-3)

On December 31, 2021, Fighting Okra Cooking Services reports the following revenues and expenses.

Service revenue$78,500Rent expense21,000Postage expense1,500Salaries expense22,000Legal fees expense2,600Supplies expense20,000

In addition, the balance of common stock at the beginning of the year was $175,000, and the balance of retained earnings was $36,000. During the year, the company issued additional shares of common stock for $30,000 and paid dividends of $20,000.

Required:

1. Prepare an income statement.
2. Prepare a statement of stockholders' equity.

I