Q1. Copies Express was incorporated was incorporated on November 20, 2005, and began operating on January 2, 2006. This balance sheet as of the beginning of operations is shown in Exhihit 1 In preparing financial statements for the first year of operations, the accountant reviewed the record of cash receipts and cash disbursements for Copies express. This information appears In addition, the accountant examined certain other information relative to operations 1 in Exhibit 2 additional items appear in exhibit 3 EXHIBIT 1 Copies Express, Ine. Balance sheet (As of January 2, 2006) Assets Cash Supplies Building and equipment Land S 2000 24,400 300,000 12,000 Total Liabilities and Owners' Equity Accounts Payable Bank loan Capital stock 338,400 S 10,400 24,000 304,000 338.400 Total EXHIBIT 2 Copies Express, Inc. Cash Receipt and Disbursements: 2006 Cash receipt Cash sales Collect accounts receivable S 176,450 64,750 241.200 Total Cash dishursements: Wages and salaries Heat, light, power Additional supplies Selling & Administration Interest (Note 1) Payment -bank loan (12/31) S 85,750 15,000 52,600 28,375 2,880 12,000 10,400 S 207,005 Payment-accounts payable Note 1 Interest at 12% per annum on the bank loan was payable June 30 and December 31 (S24000.-12)-SSSO]. Interest payments for 2006 were made when due. EXNIBIT 3 other information 1. At the end of 2006, Copies Express owed $9,875 to suppliers for the purchase of photocopy supplies for which it had not yet paid The yearly depreciation expense on the buildings and equipment was S 15,000. 2. 3. At the end of 2006, Copies Express was owed $11,000 for copyi ng services by customers who had not yet Copies Express expected that all of these customers would pay with in 30 days 4. An inventory taken of 5. Income taxes for 2006 the supplies at year end revealed that the year's cost of supplies was S 60,250. wcre expected to be $11,593. They were unpaid as of December 31, 2006 Questions: Prepare an income statement, cash flow statement for 2006 and a balance shect as of December 31, 2006