Problem 1-5B Prepare financial statements (LO1-3) Tar Heel Corporation provides the following information at the end of 2021. Salaries payable to workers at the end of the year Advertising expense for the year Building that has been purchased Supplies at the end of the year Retained earnings Utility expense for the year Note payable to the bank Service revenue recognized during the year Salary expense for the year Accounts payable to suppliers Dividends paid to shareholders during the year Common stock that has been issued, including $5,000 that was issued this year Cash remaining Interest expense for the year Accounts receivable from customers Retained earnings at the beginning of the year $ 1,800 8,900 65,000 3,100 33,000 4,500 17,500 61,900 25,200 6,200 (?) 25,000 3,700 1,350 11,700 20,550 Required: 1. Prepare the income statement for the year ended December 31, 2021. 2. Prepare the statement of stockholders' equity for the year ended December 31, 2021. 3. Prepare the balance sheet for the year ended December 31, 2021. Required 1 Required 2 Required 3 Prepare the income statement for the year ended Decer TAR HEEL CORPORATION Income Statement For the year ended December 31, 2021 Service Revenue $ 61,900 $ Expenses: Advertising Expense Interest Expense Salaries Expense Utilities Expense 8,900 1,350 25,200 4,500 Total Expenses 39,950 Net Income $ 21,950 Required 1 Required 2 Required 3 Prepare the statement of stockholders' equity for the year ended December 31, 2 TAR HEEL CORPORATION Statement of Stockholders' Equity For the year ended December 31, 2021 Common Stock Retained Earnings Total Stockholders' Equity $ 25,000 $ 20,050 Beginning Balance Issuance of Common Stock Add: Net Income Less: Dividends Ending Balance Required 1 Required 2 Required 3 Prepare the statement of stockholders' equity for the year ended December 31, 2 TAR HEEL CORPORATION Statement of Stockholders' Equity For the year ended December 31, 2021 Common Stock Retained Earnings Total Stockholders' Equity $ 25,000 $ 20,050 Beginning Balance Issuance of Common Stock Add: Net Income Less: Dividends Ending Balance Required 1 Required 2 Required 3 Prepare the balance sheet for the year ended December 31, 2021. TAR HEEL CORPORATION Balance Sheet December 31, 2021 Assets Liabilities Cash Accounts Receivable Supplies Building Accounts Payable Salaries Payable Note Payable Total Liabilities 0 Stockholders' Equity Common Stock Retained Earnings 0 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 0 0 $ Total Assets