Sarah formed a corporation with her sister in January, 2020 with each contributing $60,600 cash to start the business receiving 2,580 shares of common stock. The bakery completed its first year of operations on December 31. On that date, the account balances were as follows: cash, $58,650; inventory, $29,500; kitchen equipment, $34,000; furniture & fixtures, $60,000; amounts owed to food suppliers, $15,100; note payable to bank, $1,200; wages payable, $2,130. No dividends were declared or paid to the stockholders during the year.

a. Prepare a balance sheet for Sarah at December 31, 2020.

b. What was the amount of net income for the year? (Hint: Use the retained earnings equation to solve for net income.)