Preparation of Financial Statements: Example 1: The following items were taken from the accounting records of Bowser Incorporated. The income statement account balances are for the year ending December 31, 2009. The balance sheet account balances are the balances at December 31, 2009 except for the retained earnings balance which is the balance at 1/1/2009: Accounts Payable $ 61,000 Accounts Receivable $11,000 Equipment 132,000 Advertising Expense 26,200 Cash 54,500 Common Stock 5,000 Administrative Expense 12,300 Dividends 2,200 Insurance Expense 3,000 Notes Payable (long-term) 70,000 Prepaid Insurance 6,550 Rent Expense 17,000 Retained Eamings (beg) 16,310 Salaries Expense. 32,000 Service Revenue 117,700 Office Supplies 4,000 Supplies Expense Accumulated Depreciation 20,000 Income tax rate 30% 6,000 Salaries Payable 3,100 Additional Paid in Capital 20,000