OnDecember 31, 2019 Company, the accounting records showed the following information:

Cash

49,500

Accounts Receivable

125,000

Supplies

1,500

Prepaid Insurance

12,000

Equipment

70,000

Interest Revenue

1,000

Salaries Expense

52,000

Advertising Expense

17,000

Building

420,000

Utilities Expense

13,750

Land

111,500

Accounts Payable

80,000

Notes Payable

170,000

Common Stock

410,000

Retained Earnings

65,000

Dividends

20,000

Service Revenue

174,000

Insurance Expense

5,000

Interest Expense

2,750

1.Start any type of business with accurate reason. (10)

2.Prepare the Income Statement and balance sheet for year ended December 31 2019 (15)

3.Explain the situation of the company in your own words. Maximum 500 words. (5)